A new definition of value has been devised by professional bodies from across the construction industry which they hope will drive a transformation in the way decisions are made across the sector.
The Chartered institute of Building (CIOB), Royal Institute of Chartered Surveyors (RICS), the Royal Institute of British Architects (RIBA), and Social Value UK have joined forces with the Construction Innovation Hub to launch the new initiative.
The new value definition is the first of four core elements of a comprehensive new ‘value toolkit’ which the Hub is developing in collaboration with industry and is a key priority under the Construction Leadership Council’s Roadmap to Recovery.
Building on groundwork by Ann Bentley and the Construction Leadership Council Procuring for Value Working Group, the Hub’s value toolkit will comprise a suite of four new tools which it said would “embed a transparent, consistent and customisable approach” to improving the outcomes realised through construction projects and assets by supporting value-based decision making throughout the investment lifecycle.
Each of the five partner organisations will act as a ‘relevant authority’, bringing together groups of industry experts to build a consensus approach to the definition and measurement of value under the ‘five capitals model’. The resulting methodology will be used to drive consistent value-based decision making throughout all stages of the investment lifecycle – from business case, through procurement and delivery and into operation.
The approach will also support a data-driven approach to decision making, with consistent project and asset performance data being fed back to identify best practice and inform future decisions.
The development of the value definition will provide the foundation for the remaining elements of the value toolkit, which will be formally launched during Future of Building Week (13-17 July 2020).
The complete toolkit will help clients to:
- Establish a balanced value profile for each project or programme, shaped by both strategic policy ambitions (eg net zero, modern methods of construction) and specific client, local and user needs, with a baseline investment value index, based on established metrics and benchmarks, against which decisions and options can be assessed in the development and procurement phases;
- Select the best delivery model and commercial strategy to maximise realisation of value, based on value needs and considering the market context, risk and capability specific to the project;
- Use a new ‘procure for value’ tool allowing procurement choices to be made on delivery of best whole-life value, not simply cheapest capital cost; and,
- Monitor and benchmark value throughout delivery and operational phases to ensure benefits are being delivered, to optimise value throughout operation and to inform future decision-making on similar projects and programmes.
Construction Innovation Hub programme director, Keith Waller, said: “As we get Britain building again, we must resist the temptation to return to outdated practices rooted in cost minimisation and risk transfer and instead focus on new ways of doing things which are delivering better long-term outcomes.”
“At the heart of this is shifting away from a historic affinity with cheapness to one where delivering value in the widest sense drives decision-making.
“We are delighted to join forces with RICS, RIBA, CIOB and Social Value UK for this critical and very timely piece of work. By working in partnership and developing our Value Toolkit, we will ensure that UK construction can support the path to Net Zero, boost productivity and modern methods of construction, deliver safe, high quality buildings, improve social impact, support regeneration, levelling up and much more.”
Construction Leadership Council member, Ann Bentley said: “The concept of procuring for value is on the cusp of becoming a credible delivery model.
“Bringing together these five authorities to drive forward the development of the Value Toolkit is such an exciting step and I am delighted to be working with them and the Construction Innovation Hub.”