1. The Emirates Arena and Sir Chris Hoy
Velodrome, Glasgow
A social and economic evaluation
2. Contents
Project overview
Executive summary 4
Introduction 6
Four socio-economic KPIs 7
‘Additionality’ measures 8
Adapted LM3 methodology 9
Supplier survey 11
Local employment opportunities 13
- New entrants 13
- Work experience placements 13
- Local workforce 14
Skills development 15
Capacity building of small to
medium and social enterprises 16
Community engagement
and enhancements 17
Conclusion 18
References 19
Appendices 20
A showpiece venue for the 2014 Commonwealth
Games and a beacon for the regeneration of
Glasgow’s East End, the spectacular Emirates
Arena and Sir Chris Hoy Velodrome is one of
the largest indoor sports facilities of its kind in
Europe.
The 42,000m2
complex incorporates two
distinct venues linked by a four-storey ‘hub’
accommodating offices for governing sporting
bodies, a gym, spa, VIP and media facilities. A
community sports centre, five-a-side pitches and
an outdoor cycle track were also provided.
As innovative as it is attractive, the highly
versatile centre is capable of accommodating
a variety of sports, the project team working
with specialist velodrome and athletics track
designers and seating suppliers to create the
most effective and flexible solution.
Delivered on time and budget, the complex
has already secured its place on the world
sporting stage and will provide a lasting legacy
post-2014 by aiding the development of the
next generation of elite Scottish athletes and
providing first class facilities for the community.
Contact us
Trish McCluskey, Company Community Manager
07712 855325
t.mccluskey@sir-robert-mcalpine.com
3. EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
Sir Robert Mc
Alpine
3
4. Sir Robert Mc
Alpine
EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
This study evaluates the social and economic impacts
within the City of Glasgow with respect to the Community
Benefits clause contained within the construction contract
of the Emirates Arena and Velodrome project.
This evaluation has been carried out solely by the main
contractor, Sir Robert Mc
Alpine, in order to evaluate the
positive outcomes from the inclusion of the clause and as
an exercise of estimating additional socio-economic value
to the wider communities within Glasgow.
The key objectives within the clause were outlined by
Glasgow City Council, the client, during the tendering
process and included specific targets as well as a desire to
attain a “lasting legacy” for all projects linked to the 2014
Commonwealth Games. This evaluation, therefore, is in
response to Glasgow City Council asked the following
question in the tender enquiry documents.
Executive summary
4
Sir Robert Mc
Alpine will measure social and
economic impacts using:
• Four Socio-Economic Key Performance Indicators
(SEKPIs)
• Additionality measures – extra spending with
local SMEs and SEs
• An adapted version of LM3 - based on the New
Economics Foundation’s ‘Local Multiplier’ tool
• Conducting supplier surveys – understanding
local SMEs and Social Enterprises’ experiences
with us and what wider benefits they have
brought to, and gained from, the project.
An extract of Sir Robert Mc
Alpine’s tender responses to this
question is attached as Appendix 1, the key elements being:
5. EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
Sir Robert Mc
Alpine
The overarching results show that this project has
had significant social and economic impact to the City of
Glasgow and the wider area through the number of local
subcontractors and suppliers benefiting from winning
contracts. In addition, all sub-contractors, regardless of
where they are based, have contributed to the Glasgow
economy through their re-spending within it (e.g. local
suppliers, petrol, accommodation etc.). As a result, using
the New Economics Foundations ‘Local Multiplier’ tool,
it has been established that for every initial £1 invested in
this project, an estimated 45 pence of additional value has
been generated, clearly demonstrating that using local sub-
contractors and suppliers keeps a greater amount of money
circulating, growing and providing further investment
within that local economy.
While the above has been based on the area within
the City of Glasgow only, looking instead at a 20 mile
radius of the project (as the site sits on the edge of the city
bordering with South Lanarkshire), on applying the LM3
methodology to this wider area, approximate calculations
predict the amount of money generated to increase to 64
pence for every £1 of initial investment.
This research also suggests that other elements, such
as local and targeted recruitment, work experience
placements and skills development have contributed to
positive social and economic outcomes.
Also included is information where the impact is
perhaps not so easily quantifiable or measurable, such
as presentations and workshops for local schools and
their pupils, but which will in the future be remembered
as having contributed to the ‘legacy’ of the 2014
Commonwealth Games and the project.
5
It has been established that for every initial £1 invested in this project,
an estimated 45 pence of additional value has been generated.
6. Sir Robert Mc
Alpine
EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
6
*Social Disadvantage Research Centre, Oxford University, 2003
The Emirates Arena and Velodrome project is situated in the
east end of the city of Glasgow. On the periphery of the site
are three of the top six most deprived areas in Scotland*.
These areas are Bridgeton, Dalmarnock and Parkhead. (See
Appendix 2 for site location).
The overall purpose of this evaluation is to analyse the
impact of the contractual clause, as well as establish how
much money has been generated in the local economy from
the ‘money flow’ on the project using the New Economics
Foundation’s (NEF’s) Local Multiplier (LM3) method
(Path A) which is consistent with the methodology for local
economy multiplier measurement (Sacks, 2002:12).
This evaluation has been conducted by Sir Robert
Mc
Alpine, principal contractor for the project. Included
in Sir Robert Mc
Alpine’s tender response to Glasgow City
Council’s Community Benefits queries was a proposed
mechanism for the evaluation of the social and economic
impact of their engagement with SMEs and Social
Enterprises. Four methodologies and measures were
Introduction
indicated as follows:
a. Four Socio-economic Key Performance Indicators
(SEKPIs)
b. Additionality Measures – the extra spending with local
SMEs and SEs through having a project objective to
maximise opportunities for them
c. An adapted version of LM3 – based on the New
Economics Foundation’s ‘Local Multiplier’ tool
d. Conducting supplier surveys – understanding local
SMEs and Social Enterprises’ experiences with us and
what wider benefits they have brought to, and gained
from, the project
The details and results of these are detailed in sections 2–5.
7. EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
Sir Robert Mc
Alpine
7
*SME is a Small to Medium Enterprise of which the criteria is that annual turnover is less than £45million (or 50m) and number of
employees is less than 250.
Sir Robert Mc
Alpine has measured its impact using four
SEKPIs as follows:
Opportunity: Proportion by number of total tenders
sent out which have been sent to
at least one local SME* or Social
Enterprise.
Capacity: Proportion by number of tenders sent
out to at least one local SME or Social
Enterprise that are received back from
local SMEs* or Social Enterprises.
Ability: Proportion by number of tenders sent
out to at least one local SME* or Social
Enterprise that are awarded to local
SMEs* or Social Enterprises.
Value: Proportion by value of total tenders
awarded which are awarded to local
SMEs* or Social Enterprises.
RESULTS
For the purposes of this evaluation, the word ‘local’
is defined by those postcodes which fall within the
Unitary Authority boundary of Glasgow City Council.
Opportunity: Of 64 opportunities advertised and
awarded (some were withdrawn or
combined with other works), 27
included an Invitation to Tender to at
least 1 local SME or SE. This equates to
42% of the works packages advertised
with the number of local SMEs/SEs
being invited reaching 39.
Capacity: Of the 39 Invitations to Tender sent
to local SMEs or SEs, 34 of these were
returned, equating to 87%.
Ability: Of the 27 opportunities that included
an Invitation to Tender to at least 1
local SME or SE, 9 were awarded to a
local SME or SE, which is 33%.
Value: The value of tenders awarded to local
SMEs or SEs is £6.4million.
Four socio-economic KPIs
While the above information specifically details information
on ‘local’ SMEs and SEs, it is also notable that many more
businesses which were targeted at prequalification stage
were ‘local’ SMEs i.e. by way of being located within a “G”
postcode, but who did not make it onto the final tender list
after agreement with the Client.
The statistics below presents the same results as
applied to all SMEs. This is information which Sir Robert
Mc
Alpine believed a useful inclusion. While it has not been
possible for Sir Robert Mc
Alpine to establish conclusively
which businesses, of all those invited to complete a Pre
Qualification Questionnaire (approximately 737) met the
criteria of a SME, just under 90% have been defined as
either a SME or not.
ADDITIONAL RESULTS
Opportunity: Of (approximately) 737 businesses sent Pre
Qualification Questionnaires, 520 were
identified as SMEs, 135 were not SMEs
(leaving 82 not identified either way).
Capacity: Of the 353 Invitations to Tender, 253 were
to SMEs, 100 to non-SMEs. This equates to
72% of businesses invited to tender being
SMEs.
Ability: Of the 64 opportunities advertised, 45 were
awarded to SMEs, equating to 70% of the
contracts on this project being awarded to
SMEs.
Value: The value of tenders awarded to SME’s was
£24.9million.
8. Sir Robert Mc
Alpine
EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
8 ‘Additionality’ measures
The tender response within this section proposed
calculating the proportion of extra spending with local
SMEs and SEs by comparing the projecat to another
historic and comparable project where:
(a) = the Value SEKPI’ for the Emirates Arena and
Velodrome Project, which has the project objective
to maximise opportunities for local SMEs and SEs
(b) = a Value SEKPI’ for another historic and comparable
project which did not have this project objective
(c) = ‘Additionality’ value
In short, (a) – (b) = (c) The indicative ‘additionality’ is
the proportion of extra spending with local SMEs and SEs
caused by having a project objective as above.
For this measurement, it has been difficult to find a
“comparable historical” project as this was the first time
Sir Robert Mc
Alpine adopted the use of a business portal
for procurement purposes. The purpose of using the
portal was to allow an inclusive, open and transparent
procurement process, allowing any company the
opportunity to bid for work on this and any other project
linked to the 2014 Games. This also involved Sir Robert
Mc
Alpine devising a fair scoring mechanism for each tender
and presenting all scores to the client, with the highest
scoring bidder being awarded the contract. Therefore, the
implications of procuring through the 2014 Business Portal
have had a significant impact on the ability to “maximise
opportunities” for local SMEs and SEs. For example,
all companies issued with an invitation to tender had to
be registered on the portal. While Sir Robert Mc
Alpine
endeavoured to ensure that both its current ‘local’ suppliers
and sub-contractors were registered, this did not guarantee
they would be awarded a contract on this project.
However, there are statistics that have been collated on
three recent projects of varying (but considerably smaller)
values that are situated in or very close to the City of
Glasgow boundary where Sir Robert Mc
Alpine was the
main contractor. It is worth considering that these projects
(see ‘Results’ section listed below), because they are
significantly smaller in size and value, may naturally allow
more opportunities for local small to medium companies to
have the capabilities to carry out the tasks.
It is also noteworthy that the companies specified as
‘local’ are those with a G postcode, while at the Emirates
Arena and Velodrome project a number of G postcodes
were excluded as these were not within the boundary of
the city of Glasgow, as desired by the client, Glasgow
City Council. If Sir Robert Mc
Alpine were to ‘re-measure’
to include ALL G postcodes, the earlier statistics on the
numbers of ‘local’ SMEs and SEs targeted and winning
awards would be much greater.
RESULTS
Beatson Oncology Centre, Glasgow, G12*
Of 73 materials orders placed, 66 were with local
companies = 90%
Of 28 subcontract orders placed, 22 were with local
companies = 78%
Play Golf, East Kilbride (near Glasgow), G74*
Of 196 materials orders placed, 187 were with local
companies = 95%
Of 41 subcontract orders placed, 31 were with local
companies = 76%
Clyde Gateway, London Road, Glasgow, G32*
Of 34 materials orders placed, 30 were with local
companies = 88%
Of 15 subcontract orders placed, 8 were with local
companies = 53%
*denotes a “G” postcode, but not within Unitary Authority boundary.
9. EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
Sir Robert Mc
Alpine
9Adapted LM3 methodology
There are two potential ways of measuring the local
income multiplier within the NEF LM3 approach: Path
A measures the spending of an initial organisation
(e.g. a main-contractor of a construction project) and
subsequent re-spending (e.g. of its subcontractors) within
a local community, while Path B measures how a group
of individuals (e.g. care workers) spend locally and the
subsequent re-spend of those local businesses where the
initial group spent their money (e.g. hairdresser). For the
purposes of this evaluation, Path A was chosen.
There are three ‘rounds’ in LM3, with Round 1 being
the ‘initial income’. The initial income in this evaluation is
the value of the main contract. All sub-contract values are
Sir Robert Mc
Alpine’s ‘projected final account figures’ on
6th
February 2012. Round 1 = £92,725,687.61
Round 2 determines how much of this initial income the
organisation spends within the local economy. (Again, for
the purposes of this evaluation the word ‘local’ is within
Glasgow city boundaries.) This includes spending on: local
sub-contractors and suppliers; local staff salary costs; rents/
mortgages etc.
NOTES ON CALCULATIONS
Sir Robert Mc
Alpine local staff salary costs have been
calculated using the average salaries of all Sir Robert
Mc
Alpine employees working on the project and living
within a 5 mile radius of it. The average UK salary of
£26,000 p.a. has been used as a benchmark. At peak
production time (Sep 2011) a ‘snapshot’ of those on the
project was taken from the site electronic entry system and
used to evaluate the distance travelled to site of all those
working on the project (See Appendix 3a). Approximately
41% lived within the 5 mile radius. This also produced a
split for those working only within the ‘site offices’ and
those on ‘site’. As the majority of office only staff would
be the main contractor’s, the ‘site office’ figures, have been
allocated as all Sir Robert Mc
Alpine staff.
These figures advise 74 people on the compound that
day, 41% of whom (equating to 30 people) living locally.
This was necessary to provide figures for ‘local staff
spending’ and ‘non-local staff spending’ in Round 2 of the
LM3.
A further survey was conducted on 16th April 2012
of all staff who worked on the site over the duration of
the project. These can be seen in Appendix 3b and will be
referred to in Section 6.
ROUND 2 RESULTS
Contracts awarded to ‘local’ subcontractors/ suppliers =
£23,526,617
41% of 74 employees at £26kpa x 30months =
£1,950,000
Local SRM employees spend in Glasgow = £1,125,000
Non local SRM employees spend in Glasgow = £132,000
Round 2 TOTAL = £26,733, 617
Round 3 figures are derived from the responses to the
Questions 1-4 of a questionnaire (Appendix 4) sent to 78
sub-contractors and suppliers who worked on or supplied
to the project. 58 were returned which is a 74% response
rate. (Results to questions 1-4 are in Appendix 5.)
As 20 questionnaires were not returned, it was felt
that for these to have been included as ‘zero’ amounts in
Round 3 figures would have produced misleading results.
Therefore, in order to produce a more accurate reflection
of the ‘money flow’ in Round 3, for those subcontractors
and suppliers who did not respond, Sir Robert Mc
Alpine
estimated their further re-spending based on the responses
of those which had.
Firstly however, as there were distinct differences in the
re-spending of local businesses to non-local (e.g. workforce
accommodation would be unlikely to be required by local
companies), the supply chain was separated into these two
groups. This can be seen in various Appendices: Appendix
6a “Local Businesses Pre-Calibrated Results,” Appendix
6b “Local Businesses Including Calibrated Results” &
Appendix 7 “Non-Local Businesses Calibrated Results.”
Appendix 6a shows all those businesses based within
Glasgow which were awarded contracts and allows the
reader to review figures prior to estimated amounts added
for non-respondents: Within this group, 5 businesses
(References – 562, 563, 905, 906, 908) did not return their
questionnaire) hence their responses show ‘£0.00’.
The calculations used to generate estimated figures
for these businesses are as follows: The final values for
each contractor/supplier who responded are shown in
the 5th column. These were added together, totalling
£22,602,014.63 (as shown on the last line of this column).
10. Sir Robert Mc
Alpine
EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
10
The responses for each question were also added together
and shown at the bottom of each column. These were
then calculated as a percentage of the sum of all the final
account values. For example, in the column headed ‘Q2
(A)’, the total sum is £2,525,261.28 which is 9.9% of
the sum of the total final account values. This gave a
formula to apply 9.9% of a Final Value to Q1 (A) where
the business had not responded. A working example of
this is for Contract reference 562: as the value of that
final account was £22,475.50, the ‘calibrated’ amount
of re-spend for Q1 (A) for this contractor was £2,225.07
(9.9% of £22,475.50). This formula was applied across
each column, with the exception of Q3, as this was
for the amount spent on local accommodation (as it
was assumed that most local subcontractors would not
require accommodation for their workforce). The relevant
calibration percentages can be seen immediately below
each column in Appendices 6a and 6b.
The calibrated figures for each contract can be seen in
Appendix 6b and are highlighted in pink, and apply to
non-respondents only. The same formula was applied for
non-local businesses, and the ‘calibrated’ results are shown
in Appendix 7.
ROUND 3 RESULTS
• Round 3 Non Local Subcontractors local suppliers =
£3,771,129
• Local Subcontractors local suppliers = £2,343,797
• Non Local Subcontractors local accommodation =
£223,928
• Local Subcontractors local accommodation costs =
£7,770
• Non Local Subcontractors staff local spend = £301,205
• Local Subcontractors staff local spend = £225,196
• All Subcontractors local staff salary = £7,755,000
• (41% of 291no = 119no x UK avg wage = £26k x
2.5yrs)
• R3 = £14,628,275
The LM3 is calculated as: (R1 + R2 + R3) = LM3
R1
The LM3 on this project is: £93m+£27m+£15m = 1.45
£93m
This formula therefore concludes that for every £1 of
contract value spending on this project, a further 45 pence
has been generated.
In conducting any LM3 study, the size and
boundaries of what constitutes ‘the local economy’
must be determined. In this study, the boundaries were
determined as within the City of Glasgow. However, had
the parameters been set to within 20 miles of the site, the
results and the final amount of regenerated capital would
have been much greater
Referring again to Appendix 5, an additional 21
businesses within 20 miles of the site were awarded
contracts (almost double). Applying LM3 methodology
to this wider area, approximate calculations demonstrate
£38.5 million was re-spent in this ‘expanded’ economy in
‘Round 2’ and £7 million in Round 3, generating 64 pence
for every £1 of initial contract value.
Adapted LM3 Methodology
0
R1 R3R2
20
40
60
80
£million
100
92,725,687
26,733,617
14,628,275
11. EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
Sir Robert Mc
Alpine
11Supplier survey
The responses to questions 1–4 of the supply chain
questionnaire have already been outlined in the previous
section for the LM3 results. This section refers only
to questions 5–10. These questions allowed ‘free-text’
responses from Sir Robert Mc
Alpine’s subcontractors and
suppliers, allowing the opportunity to provide important
feedback to help drive improved business relationships. All
responses were collated and explored to identify any trends
and extract key information.
RESULTS
In the current economic climate, Sir Robert Mc
Alpine
believes the above results to be of significant importance to
their supply chain and the local and wider economy.
In particular that 36% advised that the contract offered
‘financial stability’ to their organisation, as well as 27%
declaring ‘workforce retention’ as major factors underlines
the current fragility of the construction industry and the
impact winning a single contract can make, in particular to
smaller organisations.
Sir Robert Mc
Alpine understands and values the
importance of paying their supply chain on time and this is
reflected in the above results.
The above results have been reviewed by Sir Robert
Mc
Alpine’s Project Director and disseminated to those
departments as appropriate.
Q5. Has the contract made a difference to your
organisation?
Q6. What has worked well during the contract?
Q7. What could have been improved?
Workforce retention
Financial stability
Raised profile
Paid on time
Good communication /
relationship
Site acomm and logistics
Speedier response to RF1s
Too much paperwork
Speedier payment of final
account
Improved communication
Various
11.27%
15.36%
15.37%
31.51%
22.36%
8.13%
7.23%
12.38%
3.10%
6.19%
3.10%
12. Sir Robert Mc
Alpine
EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
12 Supplier survey
Again, Sir Robert Mc
Alpine believes the above result to be
significant in this economic climate. While it does not form
a part of this evaluation, the sustainability of employment
is a key element in the socio-economic legacy of the project.
Sir Robert Mc
Alpine is encouraged by the above results
which clearly demonstrate their status as an ‘employer of
choice’ for their supply chain.
No encouragement needed
Tenders not just to be about price
Proud to have worked with
SRM on NISA
Various
Maintained employment
Supply chain and subcontract
opportunites
Profile from Project Prestige
Q8. How can we encourage you to work more with us? Q10. Any other comments you would like to add?
Q9. What wider social, ecomonic and environmental
benefits have you seen from winning the contract?
Finally, this is a high profile project delivered on budget
and on schedule by Sir Robert Mc
Alpine.
29.81%
7.90%
19.64%
7.23%
4.13%
7.41%
10.59%
13. EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
Sir Robert Mc
Alpine
13Local employment opportunities
(A) NEW ENTRANTS
A “New Entrant” is defined as a person who is trained or
employed to do a specific job and is leaving an educational
establishment or a training provider, or a person that has
been non-employed with no experience or a person with
construction experience who has been unemployed for at
least six months and is seeking employment.
Sir Robert Mc
Alpine generated employment and
training opportunities targeted at those in the Glasgow
area identified as a New Entrant. Through partnering with
Glasgow’s Regeneration Agency (formerly Glasgow East
Regeneration Agency) to recruit New Entrants and directing
their subcontractors to utilise GRA also, a significant
number of local people were provided with employment
on this contract. The number of New Entrants who were
employed throughout the duration of this project has not
been finalised at the time this report was written, however
figures recorded up to the end of March 2012 were:
• 182 New Entrants who worked over 8500 person weeks
(115 still employed)
• The average period worked by New Entrants was 47
weeks
• 57 of those 182 NE’s are Apprenticeships opportunities
Job Seeker’s Allowance ranges from £51.85 to £102.75
and depends on age, marital and parental status. For the
purpose of this evaluation, the average of the range (£77.00)
shall be used. Based on the above figures, the approximate
savings to central government from JSA alone is estimated
at £654,500.
(B) WORK EXPERIENCE PLACEMENTS
The provision of work placements helps to give people the
valuable experience needed to progress their development
and employability. Over 300 person weeks work
experience placements were delivered on this project (a
small proportion being unpaid). This is the equivalent of
one person being employed for approximately 6.5 years
(deducting 6 weeks annual holiday).
Work experience was offered to people in Glasgow who
were:
• School pupils over 16 years
• Youthbuild: Action for Children and TIGERS clients
• Further education students
• Newly qualified engineers
• Long and short-term unemployed
• Bridges Programmes clients (asylum seekers/ refugees/
economic migrants)
This, therefore, has been a further saving of approximately
£23,000.00
Work Placement - James Chang, St. Roch’s.
Based on the above figures, the
approximate savings to central
government from JSA alone is
estimated at £654,500.
14. Sir Robert Mc
Alpine
EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
14 Local employment opportunities
(C) LOCAL WORKFORCE
A ‘snapshot’ of the workforce during peak activity, showed
that 79% of those working on the project this day lived
within a 20 mile travel distance to work. Statistics on
distance travelled to site are gathered for ‘carbon foot-
printing’ purposes and are logged against the electronic
entry system. The details can be found in Appendix 3a.
Over the project duration, of the 3,354 workers on the
project, almost 1,000 lived within 5 miles and almost half
within 10. These statistics are available on Appendix 3b.
Furthermore, approximately 80% of New Entrants were
recruited through Glasgow’s Regeneration Agency (East)
allowing targeted recruitment of those living in the east
end of the city where the highest areas of unemployment
exist. This included 17 clients from Action for Children:
Youthbuild and 2 from TIGERS, both of which have local
bases and work with young people with a variety of issues
and barriers to employment. One such client has now been
employed by Sir Robert Mc
Alpine from the first day of
the Emirates Arena and Velodrome project and has now
moved on to their Glasgow School of Art site. A visual of
this (driven by New Entrants’ home postcode) is given as
Appendix 8.
Referring to Appendix 3b, statistics on the Nationality
of all 3,354 people who worked on the project over its
duration, show almost 93% were British nationals. Also
that 64% lived within a 20 mile commute. These statistics
were provided by the project’s electronic data entry system
and do not include any visitors to the site.
City Building apprentices. City Building is a Glasgow company
which successfully bid for work on the project.
“Sir Robert Mc
Alpine’s outstanding achievements on its Community
Benefits outcomes at the project were the result of an exemplar
business model that maximised every employment opportunity and by
far exceeded all targets…
…That Sir Robert Mc
Alpine delivered the majority of their 190+ job
opportunities through the Glasgow Regeneration Agency is a testament
to their commitment to our partnership. That over 80% of those
recruited came from the east end of Glasgow also demonstrates a clear
desire to meet the objectives of the Community Benefit clause.”
ZOË WELSH, STRATEGIC OPERATIONS MANAGER, GLASGOW REGENERATION AGENCY
15. EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
Sir Robert Mc
Alpine
15Skills development
Throughout the duration of the contract, continued
professional and skills development training was
undertaken, both for Sir Robert Mc
Alpine’s and their sub-
contractors’ existing staff as well as for ‘New Entrants’.
A summary of courses and the number of attendees are
as follows:
Course Att.
Apprenticeships 57
Further education (eg. BSc) / Charterships (eg. CEng, MICE) 10
NEBOSH (health and safety qualification) 12
Scottish / National Vocational Qualifications (S/NVQ) 20
All health and safety (including first aid qualifications) 644
Management and leadership / Professional development 163
Information technology 165
Plant operations 32
Environmental 160
General construction courses 271
Tool box talks 877
Given the high proportion of those working on the
project living within close proximity to the site, the
above training and development has provided many local
employees with enhanced skills and employability. While
not so easily measurable in terms of social or economic
impact, a skilled local labour market is key to any city’s
economy.
Lord Coe meets two of the Sir Robert Mc
Alpine apprentices
employed on the project as part of a targeted local
recruitment drive.
16. Sir Robert Mc
Alpine
EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
16 Capacity building of small to medium and
social enterprises
Together, Sir Robert Mc
Alpine’s Commercial and
Community Teams have dedicated approximately 300
hours to assist the capacity building of Glasgow’s Small to
Medium and Social Enterprises through various activities
and events. Specific support offered through Emirates
Arena and Velodrome arose in the following areas:
• ‘Meet the Buyer’ events (1-2 persons for half or 1 full
day) including gathering contact details from interested
SMEs/SEs and offering dedicated points of contact
within procurement team
• “How to Win Business with Sir Robert Mc
Alpine”
presentations
• Feedback to those businesses unsuccessful at Pre-
Qualification and Tender stage
• Presentations by Sir Robert Mc
Alpine’s Regional or
Company Community Manager to Glasgow businesses
or other stakeholders as identified by the client (e.g.
Chambers of Commerce)
• Continued support to subcontractors was not included
in the above hours but continues on a daily basis
through Sir Robert Mc
Alpine’s Regional and Company
Community Managers
Sir Robert Mc
Alpine also worked with several Social
Enterprises on this project as follows:
• Glasgow Community Transport
• TIGERS for training Administration Apprentices
• Bridges Programmes for work experience placements
• Unity Enterprise (who ran the on-site canteen from June
2010 until December 2011)
Sir Robert Mc
Alpine believes that Unity Enterprise’s
success at the Emirates Arena and Velodrome site has given
them substantial exposure within the construction market
and this has assisted them in securing a similar venture
at the nearby City Legacy (Athlete’s Village) site. Unity
Enterprise is based in Glasgow and has two established
café’s in the City Centre and West End. Unity functions to
assist those with a range of barriers into employment gain
valuable and meaningful training and work experience.
This contract allowed Unity to invest in the employment
of 10 New Entrants, several of whom were based on the
Emirates Arena and Velodrome project.
Both Sir Robert Mc
Alpine’s Company Community
Manager and Margaret McCarthy, Unity’s Director of
Services, spoke at the 2010 Procurex Conference on
the benefits to the community of working with Social
Enterprises.
The venture with Unity proved so successful, Sir
Robert Mc
Alpine have replicated the model at Edinburgh’s
International Conference Centre with Crescent Kitchen and
sent Pre Qualification Questionnaires to 9 other catering
SE’s in a bid to assist them in winning work with them on
potential future projects.
17. EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
Sir Robert Mc
Alpine
17Community engagement and
enhancements
Sir Robert Mc
Alpine project staff has delivered hundreds
of hours to the engagement of school children in the
Glasgow area through the following methods:
• Delivery of presentations and workshops on:
- The Commonwealth Games Arena and
Velodrome Project
- Careers in Construction
- How We Use Maths Every Day
• Assist with mock interviews for school students
preparing to leave secondary education and embark
on seeking employment.
• Arranging an apprenticeship workshop for
approximately 30 Glasgow school leavers wishing
to gain construction apprenticeships. This was
attended by 7 Sir Robert Mc
Alpine employees from
Work’s Manager to Senior Engineer, as well as both
Construction Skills and Glasgow’s Regeneration
Agency Employability representatives.
• Donating £2,650 to local community charities such
as PEEK and Youthbank.
• Donating materials and assistance to Dalmarnock
Community Gardens.
• Regular newsletters (approximately bi-monthly) to
all surrounding residential and business neighbours
informing them of progress, including internal and
external project photographs and any impact the works
may have on them (e.g. significant deliveries).
While the above activities are not so readily measurable
and the impact never recognised, Sir Robert Mc
Alpine has
received positive feedback as a result. Communications
with the many and various parties involved has generated
a strong interest in the Project, the construction process
in general and a heightened awareness of what is being
provided. The hope is that further interest in employment
in the construction industry will be generated and that
those neighbours, schools, and the general community
surrounding the site will witness tangible benefits to the
area they live and work in as a result of the project.
Cheque Presentation to ‘Young Movers’ Charity
18. Sir Robert Mc
Alpine
EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
18 Conclusion
This evaluation into the social and economic impact of the
Project has demonstrated clearly the positive impact on both
the local area and the City of Glasgow.
The findings show that 39 Small to Medium Enterprises
from within the Glasgow City boundary were Invited to
Tender for opportunities Sir Robert Mc
Alpine advertised
through the 2014 Business portal. 9 of these were awarded
the contracts which were worth £6.4 million to the local
economy. However, when considered overall, 70% of the
contracts on this project were awarded to Small to Medium
Enterprises.
Other recent projects of Sir Robert Mc
Alpine’s in the
Glasgow area show a higher proportion of contracts
being awarded to ‘local’ businesses, however there are
contributing factors such as, the large scale & complexity
of this project, the definition of ‘local’ and an open
procurement process which make it difficult to compare
with the Emirates Arena and Velodrome project.
The local multiplier, which calculates how much money
this project has generated within the City of Glasgow, was
£1.45. This means that for every initial £1 spent, a further
45 pence has been generated through re-spending with
local subcontractors, suppliers, staff and their re-spending.
However, a worthwhile exercise was also carried out to
evaluate this for within a 20 mile radius of the project as the
site sits close to the edge of the city bordering with South
Lanarkshire. As this area includes a further 21 businesses
who were awarded just under £9 million contracts on the
project, on applying the LM3 methodology to this area,
calculations predict the amount of money generated to
increase to 64 pence for every £1 of initial investment.
Furthermore, there were some significant findings from
the supplier surveys, primarily on the sustainability of
businesses and their employees as a result of winning work
on this project. While this is not specific to Glasgow, all
businesses through their further re-spending within a local
economy continue to generate money within it. There were
also a considerable number of businesses (21) who are
based within a 20 mile radius of the site who were awarded
£8.8 million between them and who will continue to
contribute to this wider economy. A further £24.6 million
of the project stayed within the Scottish economy.
Perhaps most considerable in this project is the positive
social and economic impact of 182 people (and therefore,
182 families) benefiting from an employment opportunity.
The average duration of these opportunities was 46 weeks.
51 of these are in employed Apprenticeships.
As this area of Glasgow undergoes substantial
regeneration, this evaluation demonstrates that the
construction of the Emirates Arena and Velodrome,
through Sir Robert Mc
Alpine and their subcontractors,
has been instrumental in contributing to Glasgow City
Council’s “lasting legacy” aspirations for the 2014
Commonwealth Games.
“Sir Robert Mc
Alpine’s commitment was to recruit 20 New Entrant
Trainees directly and work with their supply chain to maximise additional
employment opportunities. In addition, Sir Robert Mc
Alpine was obliged
to advertise all relevant business packages via the Glasgow Business
Portal and provide procurement workshops and capacity building
support to Glasgow companies.
At project completion, the outcomes were confirmed as;
• 183 New Entrant Trainees, including 58 Apprenticeships
• 67 Work Experience Places, totalling 317 weeks
• 230 Business Opportunities, with a value in excess of £75m
• 311 hours of business engagement and capacity building support”
MIKE MCNALLY, COMMUNITY BENEFIT PROGRAMME MANAGER, DEVELOPMENT AND
REGENERATION SERVICES, GLASGOW CITY COUNCIL
19. EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
Sir Robert Mc
Alpine
19References
Sacks, Justin (2002), ‘The Money Trail: Measuring your
impact on the local economy using LM3’ (London: New
Economics Foundation and the Countryside Agency)
Social Disadvantage Research Centre, Oxford University
(2003), ‘Scottish Indices of Deprivation’
20. Sir Robert Mc
Alpine
EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
20
Appendices
Appendix 1: Extract from Emirates Arena and Velodrome tender response 21
Appendix 2: Site location 23
Appendix 3a: Analysis of distance travelled to site of persons
working on Tuesday 6th September 2011 24
Appendix 3b: Nationality and distance travelled to
site (project duration) 25
Appendix 4: Supply chain survey 26
Appendix 5: Supply chain survey responses 27
Appendix 6a: Local businesses pre‑calibrated results 28
Appendix 6b: Local businesses including calibrated results 29
Appendix 7: Non local businesses including calibrated results 30
21. EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
Sir Robert Mc
Alpine
21Appendix 1: Extract from Emirates Arena
and Velodrome tender response
1.0 How you would measure the social and economic
impact of your engagement with SMEs and Social
Enterprises?
Sir Robert Mc
Alpine will measure social and economic
impact using:
• Four Socio-Economic Key Performance Indicators
(SEKPIs)
• Additionality measures – the extra spending with local
SMEs and SEs by having a project objective to maximise
opportunities for them
• An adapted version of LM3 – based on the New
Economics Foundation’s local multiplier tool
• Conducting supplier surveys – understanding local
SMEs and Social Enterprises’ experiences with us and
what wider benefits they have brought to the project.
These measures are in addition to the quarterly case
studies requested by the Council that will summarise
progress on engaging SMEs and Social Enterprises.
1.1 SEKPIs
Sir Robert Mc
Alpine will measure and report its impact
using four robust SEKPIs:
1.2 Additionality measure
For the purpose of this subsection, we are defining
additionality (albeit indicative) as the proportion of extra
spending with local SMEs and SEs caused by having a
project objective to maximise opportunities for local SMEs
and SEs. The way in which this indicative additionality is
measured is by comparing:
(a) the ‘Value SEKPI’ for the NISA-Velodrome Project,
which has the project objective to maximise
opportunities for local SMEs and SEs
(b) a ‘Value SEKPI’ for another historic and comparable
project of ours, which did not have the project
objective to maximise opportunities for local SMEs
and SEs
In short, (a) – (b) = (c) indicative additionality. The
indicative additionality is the proportion of extra spending
with local SMEs and SEs caused by having a project
objective to maximise opportunities for local SMEs and
SEs. The following illustration shows how the result would
be shown:
(a) Emirates Arena and Veldrome Project – 50% of value
of work awarded to local SMEs and SEs
(b) Other project – 26% of value of work awarded to
local SME and SEs
(c) 50%-26% = 24% extra spending which equates to
24% x project sum, say £100m = £24m
Opportunity SEKPI
Proportion (by number) of total tenders sent out
which have been sent to at least one local SME or
Social Enterprise.
Capacity SEKPI
Proportion (by number) of tenders sent to at least
one local SME and/or Social Enterprise that are re-
ceived back from local SMEs or Social Enterprises.
Ability SEKPI
Proportion (by number) of total tenders sent to at
least one local SME and/or Social Enterprise that are
awarded to local SMEs or Social Enterprises.
Value SEKPI
Proportion (by value) of total tenders awarded which
are awarded to local SMEs or Social Enterprises
22. Sir Robert Mc
Alpine
EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
22
1.3 An adapted version of LM3
The New Economics Foundation developed LM3 based
on the Keynesian multiplier theory, which shows how
income entering an economy circulates within it and has
a multiplier effect on that economy. The New Economics
Foundation found in one study that every £1 spent locally
delivers £1.76 of benefit compared to just 36p if the £1 is
spent outside the area. Several local authorities have used
LM3 to understand and improve how they spend their
budgets.
Sir Robert Mc
Alpine will use an adapted version of
LM3 to calculate local re-spending on the project. We will
follow the project sum to see how it is re-spent within the
local economy in three rounds of spending:
1.4 Conducting supplier surveys
Sir Robert Mc
Alpine will commission an independent
supplier survey which will be sent to local SMEs and
SEs we have engaged with during the project. By
commissioning an independent survey, we are hoping to
gain and share an insight into matters such as:
• If we have made a difference to their organisations
• What sort of difference we have made e.g. capacity
• Round 1 is the project sum spending by the Council
with Sir Robert Mc
Alpine
• Round 2 is the re-spending by Sir Robert Mc
Alpine with
its suppliers (labour, materials, plant and professional
service providers) and staff
• Round 3 is the further re-spending by our suppliers and
our staff
The simplest way to explain our adapted version of
LM3 and its results is to look at an illustration. The
illustration below shows two scenarios, 60% and 30%
spent locally respectively.
built, financial stability and so on
• What has worked well
• What could be improved
• How we could encourage them to compete for more
work from us
• If they have been awarded work on the project, the
wider economic social and environmental benefits they
have brought to the project
1.3.1 Adapted LM3 Illustration
Scenario A
60% spent locally in each round
Scenario B
30% spent locally in each round
Round One £100m £100m
Round Two 0.6 x £100m = £60m 0.3 x £100m = £30m
Round Three 0.6 x £60m = £36m 0.3 x £30m = £9 million
Local re-spending result £96m £39m
Clearly, it can be seen that in Scenario A results in more money circulating in the local economy. Usually, LM3 is
used as a tool to inform continuous improvement strategies. We believe we are also leaving a legacy of understanding
which may help shape future procurements and provide a methodology for our suppliers to do the same.
23. EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
Sir Robert Mc
Alpine
23Appendix 2: Site location
DalmarnockBridgeton
Parkhead
Emirates Arena
and Velodrome
24. Sir Robert Mc
Alpine
EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
24 Appendix 3a: Analysis of distance
travelled to site of persons working on
Tuesday 6th September 2011
Miles travelled to site
from home
Site (Office) Site Combined % of total (418)
0–2 44 54 98 23% (% within 2 miles)
3–5 37 36 73 41% (% within 5 miles)
6–10 45 37 82 61% (% within 10 miles)
11–15 20 23 43 71% (% within 15 miles)
16–20 15 20 35 79% (% within 20 miles)
21–30 13 20 33 87% (% within 30 miles)
31–40 5 14 19 92% (% within 40 miles)
41–50 7 2 9 94% (% within 50 miles)
over 50 8 18 26 6% (% over 50 miles)
TOTAL 194 224 418
Nationality Site (Office) Site Combined % of total (418)
British 192 211 403 96.4%
German 1* 1 0.2%
Indian 3 3 0.7%
Polish 1 7 8 1.9%
Punjabi 1 1 0.2%
Irish 1 1 2 0.5%
TOTAL 194 224 418 100%
94% of the workforce travel 50 miles or less and 80% travel 20 miles or less from home to the site.
96% of the workforce are British.
*Normally 3: 2 Sir Robert Mc
Alpine & 1 3D Reid
25. EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
Sir Robert Mc
Alpine
25Appendix 3b: Nationality and distance
travelled to site (project duration)
Nationality No. of employees %
Albanian 1 0.03
American 2 0.06
Australian 1 0.03
Belgian 1 0.03
British 3104 92.55
Canadian 1 0.03
Chinese 1 0.03
Czech 1 0.03
Eritrean 1 0.03
Filipino 1 0.03
French 1 0.03
German 9 0.27
Indian 33 0.98
Iraqi 3 0.09
Irish 47 1.40
Italian 1 0.03
Kurdish 1 0.03
Latvian 7 0.21
Lithuanian 3 0.09
Maltese 1 0.03
New Zealander 2 0.06
Nigerian 6 0.18
Polish 93 2.77
Portuguese 15 0.45
Punjabi 1 0.03
Romanian 1 0.03
Slovak 2 0.06
Slovenian 1 0.03
Spanish 2 0.06
Swedish 2 0.06
Turkish 1 0.03
Not disclosed 8 0.24
TOTAL 3354 100
Distance travelled (miles) No. of employees %
0–5 962 29
6–10 582 17
11–15 358 11
16–20 246 7
21–25 119 4
26+ 911 27
Not Disclosed 176 5
TOTAL 3354 100
26. Sir Robert Mc
Alpine
EMIRATES ARENA AND VELODROME – A SOCIAL & ECONOMIC EVALUATION
26 Appendix 4: Supply chain survey
1. a) Please advise how many of your sub-contractors and
suppliers were from the Glasgow City Council area.
(i.e. all G postcodes, except G60-68, G71-75, G77-84)
Answer:
b) Please advise how many of your subcontractors and
suppliers were from the G postcodes: G60-68, G71-75,
G77-84
Answer:
2. a) Please advise the total spend with your
sub‑contractors and suppliers from the Glasgow City
Council area. (i.e. all G postcodes, except G60-68,
G71-75, G77-84)
Answer: £
b) Please advise the total spend with your
sub‑contractors and suppliers were from the G
postcodes: G60-68, G71-75, G77-84
Answer: £
3. Did all/ any of your workforce require local
accommodation during the project? If yes, please can
you advise the total cost of this?
Answer: £
4. Please can you estimate the total spending of your
workforce in local shops, the on-site canteen, petrol
stations, cafes or restaurants, or any other places?
Answer: £
5. Has this contract made a difference to your
organisation? If yes, please can you advise in what way
e.g. capacity build, financial stability.
Answer:
6. What has worked well? (e.g. paid on time)
Answer:
7. What could be improved?
Answer:
8. How could we encourage you to compete for more
work with us?
Answer:
9. Can you detail any wider economic social and
environmental benefits as a result of winning the
contract?
Answer:
10. Do you have any other comments that you would like
to make?
Answer:
Measuring the Social and Economic Benefits
This questionnaire involves a series of questions regarding the Emirates Areana and Velodrome Project only. Please answer
as accurately as possible. Your answers are critical to achieving an accurate evaluation of the Community Benefits on this
project and we thank you for your support in this.
32. Sir Robert Mc
Alpine Ltd
11 Elmbank Street
Glasgow
G2 4PB
Tel: 0141 248 6911
Fax: 0141 221 2192
Email: glasgow@sir-robert-mcalpine.com
www.sir-robert-mcalpine.com
For more information visit
www.sir-robert-mcalpine.com