If you work in the world of real estate planning, you’ve likely encountered the terms ‘socio-economic assessment’ and ‘Social Value assessment’. These two concepts are closely linked, but they focus on slightly different things – and when used together, they can create a bigger and better community impact.
Definitions: What’s the difference between socio-economic and Social Value assessments?
Let’s start with the basics:
- Socio-economic assessment: Looks at how an organisation’s core activities create value for the economy – for example, by creating jobs, spending money with suppliers, or generating tax revenue. In real estate, this might involve assessing the economic benefits of construction work or the long-term impact of new housing or office space.
- Social Value assessment: Goes a step further by looking at activities and outcomes that go beyond business as usual to deliver additional benefits to communities. For instance, instead of just creating jobs, a Social Value strategy might focus on hiring people from disadvantaged backgrounds, supporting skills development, or promoting workplace wellbeing.
Evaluating socio-economic impact in real estate
At Social Value Portal, we use a staged approach to assess the socio-economic impact of real estate development projects. This looks at both the temporary benefits during the construction phase, and permanent benefits delivered once the development is in operation.
Here are the key ‘channels of influence’ we analyse:
1. Expenditure
What we measure: Spending within the supply chain.
This includes…
- The direct economic impact, or GVA (gross value added) generated through spend with suppliers.
- The indirect GVA uplift across the UK economy from suppliers’ own increased spending as a result of increased demand for their product
2. Employment
What we measure: Jobs created and sustained.
This includes…
- Gross direct labour demand (jobs) generated from the scheme.
- Indirect employment effects, such as jobs created through supply chain activities, at both the local and national levels. Under this effect umbrella, we also make estimates around local economic uplift in relation to workforce expenditure.
3. Taxation
What we measure: Tax revenues generated.
This includes…
- Fiscal contributions during construction through direct channels (like S106 or Community Infrastructure Levy) and indirect channels (like income taxes and VAT).
- Longer term contributions once the development is in use, such as council tax payments and business rates.
4. Occupation
What we measure: New homes and business tenancy.
This includes…
- For residential projects: The increase in housing supply tenures and leasing structures.
- For mixed use, commercial or office developments: Increase in capacity for organisations of different types and sizes once the development is operational.
The four ‘channels of influence’ in a socio-economic assessment: Expenditure, Employment, Tax, and Occupation
How a socio-economic assessment can elevate your Social Value strategy
A socio-economic assessment is typically summarised in a report called a ‘socio-economic statement’. But it’s more than just a report: it’s a practical tool to deepen your understanding of communities and create the tangible change they need.
By identifying how your operations influence the economy – through channels like employment, expenditure, taxation, and occupation – you gain the insights needed to build a focused Social Value strategy around these ‘levers for change.’
With this foundation, your developments won’t just succeed economically; they’ll also deliver lasting benefits for the wellbeing of the communities they serve.
Let’s look at a couple of practical examples…
Example 1: Supporting young people into construction careers
Our socio-economic analysis found that the construction of a new residential development would require 100 ‘Full Time Equivalent’ jobs (FTEs) – translating to 50 people working full time for 2 years.
While this already indicated a strong potential for socio-economic impact in the local area, our Social Value assessment uncovered a deeper opportunity for impact.
Our Local Needs Analysis flagged a high percentage of 16–25-year-olds not in education or employment (NEET) in the local area. Meanwhile, discussions in the community highlighted a vocational skill gap and limited access to work experience for young people.
Social Value in action: By partnering with regional voluntary, community, and social enterprises (VCSEs) specialised in youth employment, we develop a Social Value strategy to support NEETs into construction vocational training.
Our socio-economic assessment found that the build would require 15 FTE bricklayers and masons, and 10 FTE plumbing and HVAC trades – providing the perfect opportunity to establish:
- Two trade apprenticeships
- Three NVQ training placements
- A volunteer programme, where experienced workers would engage local schools to teach young people about careers in construction.
These targets were built into planning application, ensuring that the Social Value targets were realistic, meaningful and focused on local challenges.
Example 2: Economic growth through targeted local spending
The socio-economic analysis of a £10 million shopping centre redevelopment forecasted a significant uplift in both local and UK-wide Gross Value Added - a strong positive economic ripple effect.
However, the Social Value strategy ensured that these benefits were local and targeted by identifying ways to direct spending towards businesses in high-deprivation areas surrounding the development.
A geospatial data analysis picked up on significantly higher rates of deprivation in areas south of the site with a high proportion of ethnic minority residents.
Social Value in action: The construction company adjusted its procurement strategy to prioritise micro or small businesses, as well as social enterprises, based out of higher deprivation areas.
To do this, they engaged with a local business forum – identified in the local needs analysis - that connected local suppliers who would typically struggle to compete against larger bidders, but whose sustained business would recirculate value into the local area.
Using the combined insights of the socio-economic and Social Value assessments, the construction company was able to inject a meaningful value uplift within the immediate community.
Want to maximise community impact in your development?
Real estate projects have the power to do more than drive economic growth – they can create lasting, positive change in communities.
At Social Value Portal, we work with industry leaders like Landsec, Unibail-Rodamco-Westfield, and Cushman & Wakefield to turn developments into drivers of real impact.
Want to amplify your impact? Get in touch with our experts today.
.svg){kind=small}
