Podcast evaluation

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Combining the strengths of UMIST and The Victoria University of Manchester

MACE60058 Commercial

Management

Lecture 3: What does ‘Social Value’

Mean?

17 February 2023

Co-ordinator: Dr Obuks Ejohwomu

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Lecture 1 ???

Recap from Previously…

Linkages with unit ILOs

Lecture 2

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Research Articles

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Social Value

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Intended Learning Outcomes

1. Have you heard about social value, and if not, what do you think this is?

2. Based on your definition or understanding of 'social value', how would you capture this in the commercial projects you are running?

3. How will 'social value' relate to other performance measures in projects (e.g. time, cost, quality) and corporations (e.g. profits, ROI, working capital).

4. Is social value often sacrificed/ignored when privileging other measures.

5. Are there differences in ‘social value’ in small and large projects, and if so, what are the differences?

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Background

• Social Value has been gaining increasing interest since the Public Services (Social Value) Act promoting national discussions of social sustainability and influencing practices in infrastructure development.

• “…improve the economic, social and economic well- being of the relevant area…”

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Introduction

Introduction to Social Value - Obuks Ejohwomu

• The concept of social value – what does it really mean?

• In the last 7yrs this concept has seen increasing policy, practice and research interests:

– UK legislated Public Services (Social Value) Act of 2012. • Research efforts come under these strands:

– Defining indicators – employment numbers, trained personnel, sense of place.

– Measurement methods – SROI, CBA, social accounting, basic efficiency resources.

– Tools for reporting – GIS, economic and social cultural value.

Combining the strengths of UMIST and The Victoria University of Manchester

What is social value?

• “… improving economic, social and environmental well-being from public sector contracts over and above the delivery of the services directly required at no extra cost.”

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Why social value?

• “… a minimum of +20% SV ‘additionality’ can be obtained on contract value by way of direct community benefits.”

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Strands of social value?

• Indicators

• Measurement

• Reporting

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Examples of Social Value Criteria

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Is there a difference between sustainability and social value? Discuss

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

“Yes, sustainable and social value exist side by side and play a part together. To undertake social responsibility, we should not only consider our own interests, but also consider the overall interests and long-term development of society” [Breakout Gp 7].

Is there a difference between sustainability and social value? Discuss

Combining the strengths of UMIST and The Victoria University of Manchester

“Yes. Sustainability is a concept having a smaller scope than social value, which means sustainability is part of social value. Social value contains lots of different aspects. To achieve sustainability, companies only need to plan for the future.” [Breakout Gp 9]

Is there a difference between sustainability and social value? Discuss

Combining the strengths of UMIST and The Victoria University of Manchester

“Sustainability is consistent with social value in the long run, that is, to protect the sustainable environment and economic development. However, in the short run, there may be some conflicts. Social value's demand for the economy and social responsible may destroy sustainability, which is not conducive to long-term development.” [Breakout Gp 10].

Is there a difference between sustainability and social value? Discuss

Combining the strengths of UMIST and The Victoria University of Manchester

Give one example of how SV can be created in practice.

Combining the strengths of UMIST and The Victoria University of Manchester

Research Project - 1

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Stakeholders Engagement with Nigeria Society of Engineers in 2019

1. Have you heard about social value, and if not, what do you think this is?

2. Based on your definition or understanding of 'social value', how would you capture this in the commercial projects you are running?

3. How will 'social value' relate to other performance measures in projects (e.g. time, cost, quality) and corporations (e.g. profits, ROI, working capital).

4. Is social value often sacrificed/ignored when privileging other measures.

5. Are there differences in ‘social value’ in small and large projects, and if so, what are the differences?

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Social value…

The members of this group readily appreciate the significance of Social Values in the consideration of Engineering Projects. Many of them openly admitted that issues of Social Values were not always considered in the development and implementation of Projects. They will like to know more on how to integrate Social Values Considerations in the Evaluation Management of Projects.

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Recommendation…

• Issues of Social Values should be integrated in the consideration of and the evaluation of projects.

• The consideration and inclusion of Social Values issues in a project need not lead to any increase in project cost .

• Social Values should not be considered for all classes of projects both large (mega ) projects and small projects.

• A framework for assessing and monitoring the impact of the project on the society will need to be developed.

• Efforts should be made to popularise the benefits of Social Values among engineers and project managers and Project promoters.

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Conclusion…

• The discussions from the groups emphasised that the Society at large and National Development, can gain more from Projects than is presently the case, when the frameworks for the consideration of the benefits of Social Values and Environmental Issues are taken into consideration and monitored through out the life of the project.

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Research Project - 2

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Spatial-temporal Dynamics of social value: lessons from nuclear decommissioning case studies

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Motivation for the study

• How social value is framed and talked about throughout the project life cycle?

• Construction projects especially megaprojects can create huge social impacts.

• Most studies currently focus on quantitative measures for new and less complex projects.

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Case Study

• UK Nuclear Decommissioing Authority – “2018 forecast is that future clean-up across the UK will cost around £121 billion spread across the next 120 years or so”

• Dounreay one of 18 sites - Rurally situated on the north coast of Scotland, the population increased significantly with the nuclear development, having a lasting effect on the area.

• With the site moving towards final closure, DSRL has updated the socio-economic plan for the area (Dounreay Site Resoration Ltd 2016).

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

The technical decommissioning challenge

• The pioneering technology, on such a large scale, had been constructed without deconstruction in mind. Nuclear decommissioning challenges from Fast Breeders Reactors hadn’t been faced or solved before.

• In 2000 the Dounreay Decommissioning Plan was set at 60 years at a cost of £4.3 billion; by 2007, this timeframe was brought forward to 2032 with a forecast cost of £2.9 billion; and in 2008 this was again brought forward to 2025 at a cost of £2.6 billion; in 2018 it is still set at mid-2020’s at a cost of £2.9 billion.

• With such complex problems to solve, planning for the uncertainty of the site has proved difficult, with the programme of work and timescales still seemingly a moving target. Planning for social value in such complexities and uncertainties requires flexibility and an understanding of context.

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Social value timeline

Introduction to Social Value - Obuks Ejohwomu

Phase 1 Phase 2 Phase 3 Anticipation of new nuclear

(Begins 1954)

Responding to shut down

(Begins 1988)

Clear site mission for closure

(Begins 2000s ) Local threats Development in a rural area,

traditional industry Fear of loss of jobs; uncertainty of

site future Fear of loss of jobs

Local opportunities

Building a new cosmopolitan society, bringing opportunities

Responding to environmental concerns of nuclear

Investment in other local industry and infrastructure

National threats Large financial investment and development

Change in political support of nuclear energy (research)

Many rural areas need focus for regeneration

National opportunities

History making research for UK Focus on sustainable future energy planning

Creating a lasting legacy; learning of nuclear decommissioning

Phases of organisational social value

Excitement of building a new

society

Showing resilience through changing

times

Planning for alternative industries and investing in the

future

Combining the strengths of UMIST and The Victoria University of Manchester

10 Minutes ww.googleimage.co.uk

Combining the strengths of UMIST and The Victoria University of Manchester

Research Project - 3

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Case Studies

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

National Development Plans Oman 2040 vision has been underpinned by 4 pillars since its launch in 2020:

• People and Society

• Economy and Development

• Sustainable Environment

• Governance and Institutional Performances

Combining the strengths of UMIST and The Victoria University of Manchester

Getting sense of what Social Value can be

People and Society Economy and Development

Sustainable Environment

Governance and Institutional Performance

Proud of its identity Productive and diversified Safe and well preserved Comprehensive governance

Innovative Innovative-based Effective and balanced eco- systems

Effective oversight

Globally competitive Integration of roles Renewable resources Swift justice system

Leading a decent life Equal opportunities Efficient performance

Enjoying sustained well-being Driven by private sector

Comprehensive and sustainable development

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A Possible Solution

Combining the strengths of UMIST and The Victoria University of Manchester

Assessing Ibri-2 Independent Power Producer (IPP)

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

1. Case Study: Price Vs. Total Cost

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Which Supplier is the bid Winner based on Prize?

Category Supplier A

Supplier B

Supplier C

Price £35,000 £40,000 £37,000

Supplier Prices for a Power Generator Bid

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Which Supplier is the bid Winner based on Total Cost?

Category Supplier A Supplier B Supplier C Price £35,000 £40,000 £37,000 Warranty Period 2 Years 3 Years 2 Years Post Warranty Field Failure Rate X Expected Cost

£3000/year £2000/year £2000/year

Management/ Engineering Overhead

£6000/year £6000/year £6000/year

Training Requirements £3000 in Year 1 £1,000 each additional year

£4000 in Year 1 £1,000 each additional year

£2000 in Year 1 £1,000 each additional year

Spare Parts £3000/year £2000/year £3000/year Insurance £2000/year £2000/year £2000/year

Software Upgrades £5,000 in Year 3 £3,000 in Year 2 £2,000 in Year 2 & 4

Salvage Value £10,000 £12,000 £10,000 Useful Life of Equipment 5 years 5 years 5 years

Total Cost after 5 Years £92,000 £79,000 £82,000

Combining the strengths of UMIST and The Victoria University of Manchester

2. Social value task

Combining the strengths of UMIST and The Victoria University of Manchester

Introduction to Social Value - Obuks Ejohwomu

Task 1:

You work for a Public Sector client organisation.

You have 5-10 minutes in your groups to write a Social Value question for the procurement of:

A principal contractor for the Design and Build of a £100m new hospital in a city- based location

• The project duration is 36 months

• Construction value is approx. £75m

You should think about any guidance information you would share

You should also include an indication of how you would score this (i.e. out of 10)

Combining the strengths of UMIST and The Victoria University of Manchester

3. Part 2: Individual Assignment

Combining the strengths of UMIST and The Victoria University of Manchester

Reflective individual report

Introduction to Social Value - Obuks Ejohwomu

The point of this part of the assignment is to help you develop the skills required for assessing sustainable commercial motivation. These include active listening, value propositioning and risk modelling and application of core concepts like social value. It will acquaint you with the kinds of information required and decisions to be made when dealing with public sector stakeholders.

Combining the strengths of UMIST and The Victoria University of Manchester

Reflective individual report

Introduction to Social Value - Obuks Ejohwomu

This is an individual activity. Students who enrol will be required to write a 1000–word report on evaluating the podcast “The Political Butterfly Effect: Did Mr Blobby upend local politics in Lancashire?” Please see details in Part2 below:

Please click on this link and listen to the 14 minutes podcast and answer these questions as part of the continuous final assessment [assignment 2] for this unit.

• Question 1: What is your assessment of the Council’s commercial motivation? (5 marks)

• Question 2: Why did the project fail and state three (3) lessons identified. (10 Marks)

• Question 3:Drawing on the lessons learned (in Q.2) and your knowledge of social value, what venture would you prescribe for Morecambe Council and why?

(15 Marks)

• Note: For this reflective report a maximum of 1000 words excluding figures and references is required.

https://www.bbc.co.uk/sounds/play/m0012scy

Combining the strengths of UMIST and The Victoria University of Manchester

Reflecting on action

Introduction to Social Value - Obuks Ejohwomu

The point of this part of the assignment is to help you develop skills in the buy-side of commercial awareness, strategic thinking and cascading of vision, decision-making, problem-solving, team working and (in)formal communication skills also known as procurement. It will acquaint you with the kinds of information required and decisions to be made to procure required goods and services for the successful completion of a project.

Combining the strengths of UMIST and The Victoria University of Manchester

Expectation

Introduction to Social Value - Obuks Ejohwomu

• Q1. Assessment of Commercial Motivation. Any evidence from the podcast stating the commercial motivation for the project? [1mk] Showing an understanding of how to apply the concept of value propositioning. This should cut across 1). Product i.e., benefit, experience, feature. [1mk] 2). Customer i.e., wants fear, needs. [1mk] The required reflective element should come across too. Total [5 mks]

• Q2. Each logical reason is 3 mks. These should preferably be spread across the identified value proposition. There is a mark for linkage with core concepts or relevant citations. Total [10 mks]

• Q3. The proposed venture should be realistic and evidence potential social value contribution. 5 mks for suitability of the venture; 5 mks for social value potentials and 5 mks for the justification of the proposed venture and de-risking. Total [15 mks]

Combining the strengths of UMIST and The Victoria University of Manchester

Intended Learning Outcomes

1. Have you heard about social value, and if not, what do you think this is?

2. Based on your definition or understanding of 'social value', how would you capture this in the commercial projects you are running?

3. How will 'social value' relate to other performance measures in projects (e.g. time, cost, quality) and corporations (e.g. profits, ROI, working capital).

4. Is social value often sacrificed/ignored when privileging other measures.

5. Are there differences in ‘social value’ in small and large projects, and if so, what are the differences?

Introduction to Social Value - Obuks Ejohwomu

Combining the strengths of UMIST and The Victoria University of Manchester

Thank you

Introduction to Social Value - Obuks Ejohwomu