Why should Value for Money include social value?

By David King - on 15/05/2015

A year on from the release of the Social Value Bank, housing providers are preparing to include in their Value for Money statements, initial attempts to apply the HACT social values to their community investment activity. Needless to say some very large numbers have been calculated which may attract questions, in particular from those who aren't familiar with wellbeing measurement and social value.

It is worth recapping what these numbers represent. All metric-based social impact measurement approaches seek to place values on outcomes. If outcomes are observed in the targeted group of people, the total value of interventions on individuals and communities can be understood. By looking to an outcome's likely effect on wellbeing, the Wellbeing Valuation can derive consistent values for a huge number of activities - an approach taken increasingly taken across government and endorsed in a review of the Social Value Act.
 
Using the Wellbeing Valuation, HACT has produced the Social Value Bank, which represents the largest methodologically consistent set of values within the wider Global Value Exchange established by the SROI Network to help organisations better place a social value on their activities. A full explanation of the statistical analysis used to identify the effect of a project outcome on life satisfaction is not possible in this blog, but the process can be simply broken down as:
 
 
Wellbeing is certainly a buzzword at the moment. Is it important enough that housing providers should consider it alongside the efficiency of investment in maintaining or developing assets when developing a value for money statement? Should £1 of social value be just as important as £1 on any other part of the balance sheet? 
 
The head of the USA’s central bank, Federal Reserve chair Ben Bernanke said, “The ultimate purpose of economics, of course, is to understand and promote the enhancement of well-being. Economic measurement accordingly must encompass measures of well-being and its determinants.” Although building affordable and quality homes might seem as an end in itself, like any economic process, it’s ultimate aim to enhance the wellbeing of people.
 
Work continues toward understanding the value of a home to someones well-being, but the idea that housing associations are only concerned with the construction of homes is to deny a large part of their history. 
 
Many housing associations were set up with the explicit aim of improving people and society. Those benefits were in no way secondary, as social reformers like Octavia Hill proved even in the midst of a crisis of supply. Their paternalistic approach would likely be rejected today, but they understood that people are more important than the homes they live in.
 
Recognising this, the HCA's Value for Money Standard maintains that "boards must maintain a robust assessment of the performance of all their assets and resources (including for example financial, social and environmental returns)." - something that can be simply achieved with Value Insight
 
As the state pulls back from supporting communities and individuals, and faces increasing limits on what it is able to achieve on it's own, there will be pressure on other groups, to fill some of the gaps left behind. It will be critically important in that context for housing providers to be able to develop a clear rationale for where they invest, and the impact they are trying to achieve.  
 
With its clear focus on the value of outcomes to the individual and the ability to compare the value of outcomes across different activity areas and groups, the Wellbeing Valuation provides an important contribution to strategic decision making, as part of any discussion of purpose, impact and value for money.

 

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