How the Social Value Act (2012) contributes to wealth inequality in the UK construction industry

The Social Value Act (2012) (SVA) has legitimised public clients’ use of socially responsible procurement criteria in construction and is used by some Local Authorities (LA's) with the ultimate aim of reducing inequality. Despite this, reports suggest inequality is increasing year on year. It could therefore be argued that the SVA is, at best, making no positive difference to inequality. At worst it is further amplifying the gap between rich and poor. LA's are also being forced to depend less on central Government funding, spending only the money they generate. It could therefore be argued LA's in socially disadvantaged areas will never generate the financial capital to invest in construction works. Therefore, never experience social value, unlike more affluent LA's, further exacerbating inequality. This paper aims to explore social value (SV) in more detail, analysing the changes in LA behaviour due to the SVA and funding cuts. The paper also explores if there is a link between increased SVA use and inequality. Interviews were conducted with LA's and construction contractors with the results revealing that in some instances the SVA serves to widen and reinforce inequality. Therefore, some LA's are potentially at risk of becoming trapped in a cycle of low income, low construction investment, and low levels of SV, resulting in low income and high deprivation. This research contributes to the previously unexplored negative ramifications of the SVA and what this means for contractor Corporate Social Responsibility practices