My Lord, Ladies and Gentlemen – good morning, and thank you Lord Young for that message of pragmatism and support. I thought I would share some of our thoughts on social value.
And thank you to Peter for this invitation to partner with Social Enterprise UK again on this second Social Value Summit. The fact that both our organisations are here again after last year’s successful summit at Dartington Hall says a lot about the role of partnerships between the social sector and business.
Interserve can trace its history back, as part of what we would now call public services to the time of Christopher Wren. Since then we’ve had a long journey – through lighterage, dredging, road building, construction, outsourcing and more public services. Chances are that in coming here today our business has touched your life in some way – in transport, in retail; possibly you dropped your kids off at one of the schools we look after.
I raise this, not just as a marketing pitch, but to give you an indication of our historical role in shaping the environment, acting as an agent of change and also being able to respond to the challenge of change. Certainly our long history as an organisation is one of the factors in us seeking to ensure we maintain a long-term view over how our business is positioned and how we behave.
That in turn is what led us to launch, two years ago, our far-reaching, and we like to think ambitious, SustainAbilities programme, which is our blueprint through which we face the challenges and the opportunities of operating sustainably in the 21st Century. To us, the publication of the Social Value Act in 2012 was a timely, but largely coincidental catalyst for promoting the relevance of sustainability. But what a happy coincidence it has proved to be.
Let me say just a few words about our SustainAbilities programme. It’s a plan that shapes our actions, but it also reflects how we think – joined up and about more than money. It’s constructed around what we refer to as the four ‘capitals’ - Natural, Knowledge, Social and Financial – the assets we need in our business model. Let me illustrate:
- we are one of the country’s largest land managers and have a deep understanding of the needs and challenges of managing natural ecosystems and of sustaining rural businesses and communities.
- we are a significant buyer of timber and our cleaning businesses now use a huge range of nature based cleaning materials.
- we are committed to reducing our water usage and have pioneered water recycling technology in our Middle East business where we have a workforce of 25,000 involved in construction activities that consume vast quantities of this scarce resource.
- While we may be currently experiencing price easement in energy prices we know future energy supplies need to be de-carbonised. We have committed to halving our carbon footprint by 2020.
Our SustainAbilities programme has enabled us to see the changes we need to make and the pathway we need to get there. And it has been a powerful galvanising force to capture the imagination and the commitment of our people.
The plan describes our five outcomes, 15 goals and 48 targets and committed to reporting on progress. Our first year update is in your bags and we are in the process of writing the next.
So that’s our thinking around sustainability.
What about social value in public services? The provision of public services is a substantial part of our work, at the moment it accounts for around half our turnover. The Government has been our biggest customer for many years and we genuinely regard ourselves as public servants – many of our people, myself included, have worked in the public sector and we provide vital services to the public:
- we look after the training estate for the Ministry of Defence – acting as landlord for one percent of the total landmass of the UK;
- we provide healthcare for people in their homes and to health service providers
- we’ve placed over 20,000 long-term unemployed people back into work through our role in the Work Programme.
As an emergent force in determining what good looks like in public services, you can start to see why the concept of social value is so attractive to us and why we feel we have a considerable amount to offer.
Our vision – the single shaping force on our business - is to redefine the future for people and places. That’s about much more than building a decent road network or making attractive, energy efficient buildings – even though we do those things very well. It’s about shaping the communities in which we operate, reducing our impact on the environment, investing in the education, skills and welfare of our people and of the future workforce – young people, apprentices, graduates - and supporting social development, particularly through charitable works and through giving support to disadvantaged groups in society, including ex-offenders.
As a major employer, we’re serious about investing in the development and skills of thousands of people and we are working hard to measure the impact we are having on our communities. We employ over 55,000 people in the UK, but how do we measure the impact we have on improving skills, education standards; reducing levels of crime or deprivation? We are now beginning to measure these impacts, to benchmark ourselves and to plan how we can do more.
That focus on how we operate and on our commitments to manage our business for the long-term as a good corporate citizen is what we mean by sustainability and it shapes how we work with our partners, from the public sector, to small businesses and third sector organisations.
This brings me to Purple Futures, our new partnership with the third sector and social enterprise which - from Sunday - is now managing probation services in five regions of the UK. While Interserve is the lead partner and has the interface with the Ministry of Justice, for delivery on the ground we will be dependent on the grass-roots expertise of our partners - Addaction, Shelter, P3 and 3SC - to help shape and provide key services, particularly involving support with housing, and drug and alcohol addiction. In this endeavour we are totally focused on and measured by the social value we add.
So, I’ve mentioned measurement a couple of times. In your bags today you will find a copy of our White Paper on how we measure and map our social impact is creating in our business.
Interserve, like most businesses, generates and receives vast amounts of data. We are drowning in it. Some of it we use, conventionally, to report on our progress, risk management, people data, financial data, safety performance etc. In most cases this is very effective and helps us as managers and investors to see what’s going on, where effort needs to be concentrated. But most of the tools through which we access such data are static and are still bounded by our business silos – segmented by our functions, our markets, our clients.
In seeking to understand the social value that we create we need to see our business in the context of the communities where we operate, where our people live. We need something different. Social value is after all mostly about people and places not business units and divisions. Therefore we need something more fluid – less hidebound by the tyranny of spreadsheets.
So, to find out what impact we are having, we have set about building a mapping tool that seeks to show our business data in the context of these communities.
We have been sucking data out of our systems on payroll and staff residential locations.
We combine this with our supply chain spend data and this data is broken down by depots and local offices not the invoice processing addressees.
This information is then combined with the publicly available social data on things like multiple indices of deprivation, reported crime, average income per household, travel to work patterns, etc and mapped. This map can then be interrogated to show the impact we are having over time.
Today’s White Paper explains our thinking in more depth than I can and how we hope it will help drive social value in Interserve: measuring , targeting, inspiring us to do even more.
There is a lot more to do and the discussions that will take place throughout today will drive these actions.
One last area on which I’d like to say a few words and in which there’s something in your pack, is the public’s attitude towards big business. Hot off the press, which I hope is of interest, is The Interserve Society Report, on changing attitudes towards big business in society. It’s the first in what we hope will be a series of reports, based on wide-ranging surveys of the public into their attitude to big business.
For many of us, some of the results will come as little surprise, that there is a fair degree of cynicism and mistrust out there. But there’s also a clear call to action: what is clear is that big business can and must do more. Its role in building the prosperity of the nation and providing goods, services and employment is not well understood. The significant contribution business makes in terms of training and development around locally rooted community involvement for example, is not widely appreciated.
But there are encouraging signs for business in this report too: the research makes clear that if companies can visibly demonstrate the social and environmental value that they generate, they will be rewarded by the public and their employees and trust can be earned. This may seem obvious but so far, despite the significant increase in the number of companies adopting sustainable business strategies, the message has failed to break through. As I say, interesting reading, and I would urge you to take a look when you have a moment.
In concluding and in reflecting on how we see the Social Value Act, I should start by congratulating Chris White MP for steering the Social Value Act through Parliament, Hazel Blears MP for helping him and the Government for supporting it and Lord Young for investing his time and energy in moving it into the next phase.
To me, good regulation is regulation that outlines what needs to be done, without being overly prescriptive - and rather than instructing us how we should do it, enabling collaboration. The Act has laid down the challenge to those of us working with the public sector to be innovative in the way we operate. I would encourage us all to think of social value as giving us a new framework through which to evaluate what good looks like– moving the focus away from purely a price point for a given activity to the impact on a community measured more broadly than the narrow economics of the contracting parties. It’s a new language – one we should all learn to speak.
Read more: Summit to help realise the potential of social value