Lynne Sullivan writes on Building about whether construction can tap into new tax breaks by showing its wider benefits.
In amongst genuine concerns of threats to “green taxes”, the Chancellor’s Autumn Statement included an announcement on tax relief measures for investors in social enterprises and social impact bonds to be the first of their kind in Europe. The proposals are designed to encourage individuals as well as larger investors to support organisations that improve the lives of people and communities by introducing a fiscal measure to enable income and capital gains taxes to be offset. The scheme has the potential to allow tax relief for residential care homes and nursing homes as well as via established vehicles such as social impact bonds, and further legislation in the Finance Bill 2014 will set out the criteria of eligibility.
Defining the social value of investment is an already established methodology: ‘Social Return on Investment’ is the Cabinet Office-endorsed measurement tool developed by, among others, the New Economics Foundation. It establishes a currency for well-being economics and a robust methodology for measuring social return; it places a financial value on outcomes, for example a ratio of £4 of social value for £1 invested. A better built environment can improve social conditions, avoiding welfare and healthcare costs, and there are already examples of NHS Estates – and health boards in Wales and Very Sheltered Housing in Scotland – investing in energy efficient and fit-for-purpose homes in order to mitigate fuel poverty and conditions which compromise residents’ health and economic prospects. Oldham Council, a large housing group and Oldham NHS Clinical Commissioning Group (CCG) have invested in retrofit measures which the health service calculates will save it £300,000 a year in reduced hospital admissions and social costs.
Now, in the face of dwindling social housing grant and lowered capital budgets from sub-market rental income, some housing providers are looking at shaping social value investment packages which effectively bundle investment in buildings with investment in the prospects of a community. It has been estimated that building one new home creates 2.3 new jobs; providing skills, opportunity and money to spend in the local economy, which in turn stimulates further opportunity as well as producing more comfortable, healthier homes with a substantially lower energy demand and carbon footprint. In this way registered landlords, proposing measures to improve the prosperity and health of a community over time, could under this new scheme, attract new investment partners.
Market investment in projects of social value could stimulate new built environment opportunities. From the design and construction perspective, the residual issue is: what kind of built environment outcomes deliver real value over time? These would have to be climate change resilient, and needing nearly zero energy to operate – as well as delivering spatially and socially.
Lynne Sullivan is a founding partner of Sustainable BY Design.
Original article can be viewed at: http://www.building.co.uk/analysis/comment/the-social-value-of-good-building/5065508.article.