Social value no longer an optional extra for transport infrastructure planning

Capital-intensive transport initiatives are regularly framed and promoted as ‘city shaping’ infrastructure. But if they are to leave a lasting legacy for the communities that use them, these projects must be planned, designed and delivered with social value outcomes in mind.

What is social value?

Social value is the total impact of a project or investment on an individual’s wellbeing. According to the UK Green Building Council, it: “encompasses environmental, economic and social wellbeing and understands each of these in terms of their impact on the quality of life of people”.

Inherently placed-based, social value is an evolution of traditional ‘placemaking’ with a primary focus on improving the quality of life within communities.

To create it through transport infrastructure, we need to make liveability, prosperity, and resilience central tenants of our design and development practice−from the way we write business cases to the approaches we employ for downstream procurement, construction, and operations.

There are real and tangible benefits to be gained from implementing a social value approach. Transforming rhetoric into reality can however be challenging when it comes to assessing and measuring social value impacts on quality of life.

View from under Carnegie train station with walking paths

What's standing in the way of social benefit?

Here in Melbourne, our urban form is evolving into a polycentric form. Accompanying this transition are new infrastructure and mobility challenges.

Technological disruption, and the ongoing uncertainty presented by the global COVID-19 pandemic has us grappling with the impacts (and benefits) of working from home. There is a corresponding reduction in public transport use and micro-mobility is on the rise. People are also increasingly seeking to live, work and play with a "purpose".

Man riding bike through a city

All of this disruption and societal change is forcing us to reconsider our approach to transport infrastructure planning. To develop high quality projects that enhance the lives of Melburnians, we need to improve our understanding of what city communities want, need and value. And we need to recalibrate our approach to address the macro trends and challenges that are facing those same communities. 

How we evaluate a project's cost and benefit is a key area to look at.

Traditional business case processes consider narrowly defined, yet easy to quantify project economic benefits (travel time savings etc), but the social value benefits that a transport infrastructure project can bring are much harder to objectively quantify.

"With work, travel and life-changing rapidly in Melbourne, the days of calculation-based decision-making on infrastructure may need to make way for a more conversation and qualitative based approaches to project ideation, design, and decision-making."

Greg Harrison, RPS  Victorian Lead for Strategy and Investment stands in front of Pillars outside the State Library of Victoria in Melbourne CBS.

How do we ensure projects are delivering on the social front?

It’s encouraging to see that the conversation about prioritising social value in transport infrastructure’s planning and design is gaining momentum in Australia.

While their approaches may differ, the states and territories have introduced a variety of policies from First Nations procurement to the development of jobs and skills, and incentives to purchase from small, regional, disability and other social enterprises.

Train at a Melbourne train station

The recent refresh of the Infrastructure Australia’s Assessment Framework is also acting as a catalyst for change, with the update including new guidance material on capturing quality-of-life benefits. This includes a technical guide for economic appraisal with an updated methodology for social cost-benefit analysis.

Australia can learn a lot from places like the United Kingdom (UK). The introduction of the Public Services (Social Value) Act 2012 positioned the UK as an early leader in this space, and has generated examples of both good policy and leading practice.

Melbourne trams in busy Melbourne city street

The UK Government has taken further significant steps recently by embracing social value in government procurement. It’s Procurement policy note: taking account of social value in the award of central government contracts (PPN06/20) introduced a new model to deliver social value through government's commercial activities. Under this policy, at least 10% of every government procurement decision is based on the scoring of a social-value proposal attached to a tenderer’s bid.

In New Zealand, Treasury has developed and adopted a bespoke Cost-Benefit Analysis tool (CBAx) - a spreadsheet model containing a database of values licenced from the Australian Social Value Bank. The aim is to help government agencies monetise social impacts and do cost-benefit analysis to inform decision-making.

Upscaling social procurement for big social value

Here in Victoria, our Social Procurement Framework defines ‘social procurement’ as the use of an organisation’s buying power to generate social value above and beyond the value of the goods, services or construction being procured.

The huge number of transport projects that we have in progress and in the pipeline including city shaping transport infrastructure initiatives such as the Suburban Rail Loop and Melbourne Airport Rail−mean we have an unique opportunity to integrate social value now, and create a better future for Melbourne through the investments we are making. But while the framework and intent is there, now is the time to upscale.

Rather than tick box tenderer compliance on things like local industry participation, we need social value to form a core objective, and outcome for all of our projects and investments.

By embedding social value, we can ensure Victoria’s ‘Big Build’ doesn’t just generate transport assets that get us from A to B, but that it acts as an enabler of increased liveability, prosperity, and resilience, too.

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