Friday, 4 November 2022 – What is the Difference Between Corporate Social Responsibility and Social Value?
Manchester City Football Club has accused Jurgen Klopp of racism. Before the match between Liverpool and City on 16 August, Klopp said, “There are three clubs in world football who can do what they want financially. It’s legal and everything, fine, but they can do what they want” and “nobody can compete with City”. The other two clubs were Newcastle United and Paris Saint-Germain, all three owned by petrostates on the Saudi peninsula.
Klopp denied any intention to be xenophobic, and it is hard not to agree with him. He did not say anything that is not factual, or at least very well understood by everyone involved in football, including the fans watching it, which basically includes everyone on the planet. But there are underlying implications to the factual assertions made by Klopp. He obviously implies that this financial power is having an invidious effect on the competition that is the Premier League and, perhaps more specifically, between Liverpool and Manchester City to win the title and, perhaps, in the future, for Newcastle to dominate the competition alongside City just as PSG has dominated Ligue 1 in France. However, to infer that Klopp was motivated to say that the problem was that all three clubs have owners of a similar Arabic ethnicity seems to me, and clearly to Klopp in his denials, to be contriving to take offence. Even if Klopp were a racist (an assumption that seems to defy all evidence), there are plenty of things for him to dislike about the royal families of the United Arab Emirates, Saudi Arabia and Qatar other than their shared race. And to compound Klopp’s problem is that it is clear to everyone that these unlikable qualities are the royal families’ motivation for wanting to own European football clubs in the first place. Obscene inequality, enriching themselves by destroying the planet with fossil fuels, human rights abuses, medieval notions of the role of women in society, murderous homophobia, abuses of foreign workers building their football stadia, unfair and uneven wars on poorer neighbour countries triggered by ethnic, racist motives, and making it harder for Liverpool to compete for the title and therefore, ruining the fairness of what is a popular competition, may be higher on the list to dislike them than a dislike of their race. And if Klopp isn’t racist, then it seems quite easy to make the leap that you can remove this from a list of motivations to make the statement he did and still be plenty motivated to do so.
Obviously this is obvious and this is just a billionaire hissy fit stemming from the royal house of Al Falasi rather than genuine concerns of racism raised by “Manchester City Football Club”. But Klopp’s comments are genuine concerns about these petrostates. The whole point of buying these clubs and Qatar buying the rights to host the 2022 World Cup was to make them more likeable to the rest of the world. They can buy the support of British politicians like the Foreign Secretary, James Cleverley, to apologise for their backwards and intolerant ideas, telling gay fans to show respect for Qatari law which criminalises their sexuality. They should “compromise” and be “flexible” he warned. Imagine saying something like that to black fans if it was a host nation that insisted on racial apartheid? It is sportswashing and, with it, they can carry on these offensive practices if they are otherwise liked by the rest of the football-watching world.
Why they want to carry on with
these practices and also be liked, seems to me a bit infantile but this
does seem to be a pattern. PR can
serve a purpose beyond the (literal?) ivory towers of Arabian royalty. Some time last year I was invited to a meeting
of a “Taskforce” of local planning authorities, public sector social value
officers and developers discussing the application of social value measures in
S106 planning agreements. A director of
Mulalley, a large construction developer, was in attendance and he was telling
the group of their policy on “Corporate Social Responsibility” and the good
they already do in the communities in which they build and refurbish developments. The implication seemed to be that local
planning authorities do not need to impose planning and social value
obligations on developers because it is already in the interest of developers
to contribute, and they do. It’s in
their interest to train and employ local residents in construction skills
because skilled workers are needed by the industry and the industry should lead
on this.
But I know they don’t. I especially know Mulalley doesn’t because I’ve worked with them before on S106 on the construction of the Tottenham Hotspur Stadium. Everyone agrees that developers should train and employ local residents, from the Mayor of London setting London boroughs targets to build new homes, workplaces and infrastructure, to local authorities granting planning permissions, Further Education colleges and universities delivering apprenticeships and NVQs, the Construction Industry Training Board (CITB), the industry body for the construction sector, taking levy payments from members to pay for the construction skills training, including apprenticeship courses, obligated by local planning authorities, and the developers themselves. Yet, they don’t. Even the Royal Institute for Chartered Surveyors (RICS) recognises that the construction labour force is in crisis with few British workers trained and an over-reliance on foreign workers who are increasingly preferring to work in other countries (see What Do Assistant Directors Do? on the devaluation of Sterling, Brexit and “Hostile Environment”). Yet, the industry leaders resist making contributions to their own industry and it is left to the Mayor to impose legal requirements on London boroughs to insist developers train up British-based workers to build the number of buildings the Mayor promised Londoners because he knows it is not going to happen otherwise. And here is this guy from Mulalley telling officers responsible for the application of these laws that it isn’t necessary; he has got it in hand.
Now the council’s Regeneration Team is in the process of commissioning major refurbishments for four housing estates. This is going to cost residents about £28m and construction company, Mulalley, along with Axis Group, Breyer Group and Equans, have submitted competing bids for the contract. I have been asked to score their social value proposals accounting for 10% of the total score, in which the proposed commitments must have a proxy value of at least 10% of their quoted price to be considered at all. All four focussed on the measures of employing local residents and including local businesses in their supply chain for this contract. No commitments were made though.
In their written “method statement” attached to their quantitative proposal, Mulalley said they would “seek to provide 11 local people with full-time employment” and “maximise local spend”. How, they don’t say. And no commitments have been made that they will do anything more than “try” and “seek”. Axis was more committed to using local suppliers because they listed the actual supplies, values of the contracts and the suppliers they had identified that could, and had the capacity, to supply these needs. Unfortunately, most of these suppliers listed in their bid are not in Hammersmith & Fulham. Perhaps they thought we wouldn’t read that far. Equans stated they would not commit to using local suppliers who did not meet their due diligence requirements. And Breyer said it’s not up to them, but an independent board of quantity surveyors, to choose which suppliers to use. All four attached an amount of money to local procurement to take their bids over the 10% threshold. I discounted all of them on the basis that the written description described not committing to delivering this social value, contradicting the number committed. And I sent my scores to the Corporate Procurement team.
With none of the bidders meeting the minimum threshold to be awarded the contract, it was no surprise the Head of Corporate Procurement, with now no-one to procure, emailed me with a devious and tortuous plan:
“Paul
…
“The Public Contracts Regulations 2015, both Regulation 67 and Regulation 18, state that we must publish, in full, the evaluation criteria and assessment arrangements. As we stayed silent on the matter of making adjustments to the self-declaration amounts, we have no powers to adjust. The Quantitative score must stand as being based on the self-declaration. Our powers to interpret and assess the social value do, however, lie in the evaluation of the Method Statement…
“Disqualifying any bidder in this situation would be unlawful under the Regulations – if they declared 10% SV…
…
“[Head of Procurement and Commercial]”
Huh? My own powers to interpret this email are certainly limited. I think he is saying that we did not say in the original Invitation To Tender (ITT), the published document explaining the rules of bidding to potential bidders, that we could ask bidders to make adjustments to their bids if none of them met a minimum threshold, and now it’s too late because we have already received all the bids, to ask them to change their bids and actually commit to delivering social value, even though the ITT gave this instruction and explained the dire consequences if they didn’t. What procurement Regs 67 and 18 are, I have no idea, but I think he is implying that, because we can’t ask the bidders to “adjust” their bids at this late stage, we can fall back on a legal loophole and claim that numbers are not open to interpretation and words are. Therefore, where there is a contradiction, the value of social value proposed should be given priority over the method statements, even though the ITT specified that, without a method statement, the proposal would be disregarded. By this interpretation of the bidding rules, all four bidders have proposed more than the 10% minimum threshold.
Like with S106 planning obligations, Mulalley and Axis have historically never committed to local training, employment and procurement and there is no reason to think they will here, especially when they are (according to my abilities of interpretation, superior to that expected of any other mortal according to the Head of Service’s interpretation of Regs 67 and 18) explicitly saying they won’t in their bid. To compound my suspicions, Axis was awarded a contract in October last year for the refurbishment of another estate, Sulivan Court in Fulham, worth £5,476,213, on which they have delivered precisely no social value with three weeks remaining on the contract. I wonder what the regs say about interpreting anything from this?
Luckily, regardless of what the
objectives of public procurement regulations might be, the council’s own
constitution affords a sense-check that procurements meet the council’s
policies before they are allowed by the Contracts Assurance Board (CAB). I replied,
“Hi [Head of Procurement and Commercial],
…
“Re the point of law, I’m not sure I understand this. Each bidder made two declarations of the quantity of social value they are proposing to commit to: one quantitative and one qualitative. And, for the big ticket items, mainly local supply chain procurement, each bidders’ declarations of quantity contradict themselves.
“There’s also the issue of the implications. Even if the proposals were considered to legally meet the minimum threshold of compliance (10%) from a procurement point of view, I’m bound to comment in the award report that the winning bidder didn’t commit to deliver 10% and there is then a risk CAB decides not to award on this basis.
…can I highlight another implication that Axis, one of the bidders here, hasn’t delivered any social value on the Sulivan Court Phase 2 major refurbishment contract including £1.35m of proposed local supply chain procurement. Local procurement makes up the bulk of the social value proposed by all four bidders here.
“Paul.”
His reply was
rather eccentric, and I certainly don’t have the powers to interpret this:
“Paul,
“Could we speak Thursday / Friday. [sic]
“I realise I have made an intervention on a point of law that must make your [sic] feel like I am a terrible bruiser, And [sic] I am sorry.
“Could we find some time to chat or maybe I could buy you a coffee or a beer in person to say sorry as we all think you are fabulous and I feel I’m rather a JCB driver on this!
“I appreciate the delicacy of the issues and unfortunately, I have not acquitted myself as I would have liked.
“Friday 9:30 for a chat + an apology from me?
“[Head of Procurement and Commercial]”
Beer at 9:30 in the morning? I assume this is a stream of consciousness and he didn’t know where he was going with his email as he was writing it. It was sent at 10:45 on Wednesday night so he may well have been drunk, at least to declare my fabulousness, although, he wrote it with letters rather than numbers so it can’t legally be considered a declaration.
I agreed to meet but he never replied. Instead, he video-called me this morning. I explained again the concerns I had with the proposal, I had no intention of changing my scores, but he is welcome to disregard them and get someone else to score them instead if he thinks my interpretation of the bids is illegal. But I reiterated that this was academic because I would simply add my comments in the CAB report to recommend not sanctioning this procurement because it does not comply with Social Value policy. I described the possible bizarre scenario that we commissioned Axis Group with no commitment to deliver social value while simultaneously invoicing them for financial remedies for not delivering social value on their last contract amounting to just under £1.5m and with the expectation, given by them in their bid, that we will be doing so again after this contract for another £2.4m.
And that is the difference between “Corporate Social Responsibility” and “Social Value”. The first is offsetting being unliked by pretending to do good things. “It’s legal and everything, fine, [and] they can do what they want.” The latter is doing them or being held to account or not. The social value lead for a more enlightened developer, but still battling internally to get her directors to understand the difference, provided the following handy diagram. Despotic state leaders and greedy construction developer directors, take note:
What Corporate Social Responsibility and Social Value have in
common, but vitally, also what the main difference is: accountability.
“If a rich man wants to help the poor, he should pay his taxes gladly, not dole out money at whim.”
Clement Attlee, 1920
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