Kensington and Chelsea Council is reviewing its Social Investment Impact Report, which evaluates the social, economic, and environmental impact of council activities, supplier contributions, and the work of the voluntary and community sector during the 2024/25 financial year. The report aims to set the standard for how social investment measurement at the council will be conducted, allowing for more transparency and fairness in decision making about the allocation of Council-owned assets, resources and funding.
The Overview & Scrutiny Committee met on Wednesday to discuss the report, which highlights significant social and economic value generated through council spending.
According to the Social Investment Impact Report Cover Note 2425 1.pdf, the council estimates that £43.36 million in social impact and £50.23 million in economic impact were generated, alongside £1.31 million in environmental value. The council uses HM Treasury's Magenta Book for managing activities and ensuring social impact, and applies the Green Book's social cost-benefit analysis to understand savings and benefits. It also conducts Economic Impact Analysis to see how local spending boosts economic growth and job opportunities, Environmental Impact Analysis to evaluate contributions to sustainability goals, and assesses Operational Social Value to understand long-term impacts. Each key performance indicator (KPI) used to measure social value has a monetary proxy value from the HM Treasury Unit Cost Database.
One notable example is the parks maintenance contract, which added over £2.6 million in social value through job creation, apprenticeships, volunteering, and employment support. The report also highlights the social return on investment (SROI) from property subsidies given to the voluntary community sector (VCS) through social investment leases.
For example, the Children's Book Project on Golborne Road has an SROI of £3.28 for every £1 of rental discount, while World's End Place has an SROI of £5.16.
The report also considers intrinsic social value in evaluations of impact, in addition to added social value. Intrinsic social value refers to the inherent worth of an organisation, team, or service in terms of its benefits to society. Added social value refers to the broader value that an organisation, project, or service contributes to society beyond its primary or statutory function.
During the meeting, councillors discussed the methodology used to calculate social value. Christine Edson, director of the social investment and property, clarified that the calculations are not an exact science, but rather a regulated assessment of value. Molly Bookchard explained that the calculations are based on real data collected by the council on various projects, and that the measurement tool looks at HM Treasury's Green Book and Magenta Book, which provide a framework for assessing social value, monetizing the impact, and valuing economic, social, and environmental benefits. She added that assumptions are sometimes made around outcome duration, but that the data and outputs that make up the calculations are real.
The report acknowledges that the monetization is only one part of the picture and won't always represent the full breadth of impact. To address these limitations, the council is trying to make sure their data collection captures what is meaningful and is learning from one another around having that aspect right.
The council works with services and voluntary community organizations around their data collection and helps them improve their data collection to ensure the data is perceived as good enough to use in calculations.
