On the back of a profits surge and £1.6bn of orders, Mike Hughes talks to Esh Group’s Director of Corporate Affairs Darush Dodds about its social value journey and the key elements of its success.

It is often true that you can assess the success of a city or town by the crane count – if the skyline has several, then we can be confident that there is a lot of development going on, investors are interested and hopes are high.

Now as I travel around the North East I have found myself doing an Esh count. The number of boards with the familiar green logo seems to have risen hugely over the last few years as if they had been planted at one site and were now seeding investments all over the North East.

The forest of Esh is natural growth at its best, with the most recent set of results showing a 50 per cent rise in pre-tax profits and a £1.6bn order book for one of the region’s leading privately-owned construction, development, and property services businesses.

(Image: Esh Group)
In the BUSINESSiQ boardroom at the heart of Darlington, Darush told me: ‘Following five years of restructuring we are now a relatively simple business. Most people know what we do, however our social value proposition demonstrates who we are.

‘Our strategically designed business model can even out peaks and troughs associated when working across multiple sub sectors, this has a huge advantage – our social value machine never stops. We work in all 12 of the region’s local authorities, from city centres delivering major civils schemes to suburbs delivering critical housing infrastructure – our social reach, impact and influence is expansive.’

Esh provides civil engineering, affordable housing, refurbishment, retrofit, private housing and commercial build services to the private and public sector, and Darush told me this powerhouse of a performance puts Esh in a position where it can also be a leader in helping its region grow, making a real difference through the social value that is so close to its heart.

Through the whole group, this is the other reason why companies on their sort of scale are so passionate about sustainable success – because it gives them the drive and the tools to make their region better.

Darush added: ‘I have been with Esh for 17 years now and have seen us grow to a size of business which was almost unsustainable for a “local” contractor because we were operating over Cumbria, the central belt of Scotland and with a massive operation in Yorkshire – totalling about 17 or 18 different businesses.’

In restructuring the business into its focus divisions, the pipeline of social value has been linking the Group operation for many years. I was introduced to the concept by Darush when we first started working together several years ago and it was as clear then as it is now that ‘giving something back’ was a part of Esh’s DNA. Inbuilt and immovable.

“Back in the day, perhaps 15 years ago, we would successfully bid for a scheme, then deliver an employability workshop, work experience placement or sponsor a local sports team ‘proactively’.

‘But if you look at the evolution of social value, mainly through procurement frameworks, you will see that in 2010, social value came out in white paper form for anyone spending money from the public purse for a product or a service: “this is why do this... we advise that you do this...”

‘In 2012, the white paper became an Act and we were told to make a consideration of five per cent in the bid, and that’s when we thought well, we’ve done this for 10 years already, so now we need to systemise, grow our programme range and ensure the commitments we make at bid stage are specific to that local area, and, most importantly, deliverable.’

It’s worth drawing a comparison here between social value and the environmental revolution in the North East. Some years ago when we started realising the “green” conversation was getting louder, some firms started to include it in their profiles so they were seen to be part of the movement. Then it became a necessity to save the future of our planet, and new technologies and investment started to create a new cluster economy that they now dominate.

It’s been the same sort of journey for CSR, ESG and social value – it was the right thing to be seen to be doing but now its true worth is realised and the region can’t reach its full potential without it.

Darush tells me: ‘What really changed in the construction world is TOMs – the Themes, Outcomes and Measures System – a system brought in to put an accountability and measurability on social value commitments.

‘This practice is mainstream and across the sector it’s delivering some exceptional outcomes for construction clients and their communities. For us, we welcome the evolution, we’re a business with a family ethos and have known for years that this is the right thing to do.’

The clarity that this sort of thinking is bringing to procurement is vital. With firstly CSR, then ESG and now social value apparently competing in the same arena, there was bound to be confusion over which one to invest in.

To quickly aggregate opinions and definitions, I asked ChatGPT what it thought the difference was. Given that it learns from information already out there, its answer helps us understand overall perceptions:

‘CSR is when companies do good things for society and the environment, often beyond what is legally required. It includes activities like donating to charity, volunteering, and reducing pollution.

‘ESG is a framework used to measure and report how well a company manages issues like Environmental (how a company impacts the planet), Social (how a company treats people and Governance (how a company is managed)

‘Social value refers to the positive impact a company has on society and communities. This can include creating jobs, improving public health, and supporting education. It’s about the beneficial changes that result from a company’s actions.

‘Think of CSR as the actions a company takes, ESG as the way those actions are measured and reported, and social value as the positive outcomes from those actions.’

That’s one way of putting it, but Darush adds the passion and insight when he says:

‘CSR can be a sweeping statement of things your company will do over a period of time. There’s no granular detail in that measurement, it’s just the way you’re inclined and good elements of it still exist now.

‘If you take ESG, it is inherent in your company – an assessment of your company’s maturity and highly relevant to how you operate, trade, make investment decisions, raise funds and perform on the stock market.

‘In construction contracting, social value is delivered on a scheme-by-scheme basis focusing on that client, their community, their specific local needs and areas of highest impact within a construction projects’ time frame.’

(Image: Esh Group) The extraordinary forward view that Esh has, with the largest order book in its 25-year history stretching out over the next ten years, allows space for planning and resource management. But Esh Group won’t be sitting back and waiting for others to catch up.

‘Every year we build on that, but it’s really important to make the point that we are actively seeking further opportunities within our core markets,’ says Darush.

‘Certainly, having a nice head start each year is brilliant. It allows you to plan for the future, invest for the future and employ for the future.

‘But every day something changes, particularly at the moment with the new mayors, devolution and national politics it can all affect procurement. That certainly keeps us on our toes as key issues evolve.’

In tackling those issues, Esh sticks to the Six Es around which it has built Constructing Local, its flagship framework of 30 programmes: Employment, Education, Engagement, Economy, Employees and Even Greener, the latter of which aims to drive home Esh’s own target of Net Zero emissions by 2040.

One of the key goals going forward is to make sure everyone is given the chance to build a career here in the North East and not have to learn here and then work elsewhere. Esh Group is showing that there are gamechanging opportunities to make this possible, but they have to be identified and then there has to be collaboration to bring it all together.

‘When the T-level came out, we piloted what they called Year Zero with the Department for Education where 45 days of work experience were part of a proper qualification – it’s what the government was trying to replace the Level Three with,’ said Darush. ‘Now the new government says it might keep the Level Three, so we’re already thinking how we can best commit to a new approach to work experience.’

The inclusivity they champion also means that skills are being rediscovered and redirected to help people whose lives are changing continue to make their valuable contribution to society, which is supported through Esh’s Armed Forces Employer Recognition Scheme Gold Covenant status.

‘The armed forces are already a massive area for us because per head of the population, most armed forces are repatriated to the North East. When someone leaves the forces, there is a 16-week window to retrain them for Civvy Street, and now the Government will pay for that training, so I am telling our colleagues there is a great opportunity to make sure such valued workers don’t slip through the cracks.’

With so much change across different sectors and the increasing drive to bring success here and then build on it, collaboration has always been a key part of the region’s DNA. We are learning to have the confidence in our own skills and see the overwhelming power of a united region, and that puts us in control of our own future, particularly as devolution has offered so many opportunities for us to grow.

That feeling of shared responsibility can benefit businesses at every level and be a major factor as the North East grows again.

‘Our knowledge spans 20 years and we’re primed to help guide client communities and the supply chain to bring them on the journey and support them through any changes coming our way,’ said Darush.

‘SMEs don’t always have the resources that Esh has – a dedicated social value team who day in day out deliver our commitments. We want to take our supply chain on the journey with us when they can help us deliver our commitment. We won’t put them in a headlock, but we’ll ask if they can help little Johnny or Jennifer who want to be a plasterer or an electrician. There are some things we can’t teach, but if an SME in our supply chain can, then we have the perfect fit.

‘A lot of us who sit around the table at CECA – The Civil Engineering Contractors Association – have been discussing the benefits of such shared thinking. Why are we so often poaching staff from each other? We’re all one big family and there’s loads of work to go around, so why not create even more job opportunities, because there is a clear route to follow to go from being economically inactive to being trained at entry level in civils.

‘So we reached out to Karbon Homes and Thirteen – our landlord partners who work with people who are economically inactive – to ask how many people who live in their homes have an interest in construction. They came straight back to us with numbers and said if we would create some job opportunities, they’ll leverage funding to put them through training.

‘That all happened – and provided us with a model going forwards – because we talked. We know each other, we like working together and we know the region can benefit from that.’

This is an open and new way of working. It takes plain speaking and confidence, but that is something that we have never been afraid of in the North East, and with devolution already making a huge difference under Ben Houchen in Tees Valley and the vast potential of Kim McGuinness and the new North East Combined Authority, the stars are aligning and Darush has high hopes.

‘I went to all of the build-up and the live events when the mayors were campaigning to look at things from an Esh perspective and I think Kim will be a brilliant advocate for the region,’ he said.

‘If you take Ben Houchen in Tees Valley, the amount of investment that he’s leveraging through the opportunities at Teesworks and the assets they have there to help people become economically active has been fantastic, and in the North East Combined Authority, I think Kim’s manifesto is very well aligned with what Esh want to achieve.

‘If you look at opportunities, building more houses, retrofitting, environmentally-friendly homes and helping to reduce anti social behaviour – these are all areas we are already delivering along with the wraparound items that are all a part of doing those works – so the social value package is excellent.

‘But the main point for me – wherever it is and whoever is standing in front of me – is to ask if this person will shout out for our region, be proud to harness our thoughts as businesses and communities and feed them into government so that we are given even more powers. As long as people listen, we can make a difference.

‘Our approach here has always been “tell me something that you need and I’ll tell you something that I need and we’ll work on that together”.

‘To help us do that, describe a skills pipeline of your business and what the growing sectors are, and then look at the sectors that aren’t here yet but that will be a good investment over the coming years.

‘If we work on that together then we take responsibility for developing a future that we might not see but which will be the foundation for this region.

‘At the moment we’ve got a five-year stock of talent, whether they are currently in college or university. So after that five years of seeing them graduate and join the workforce, where will the next five years come from? If you look ahead 15 years, those workers are now just coming out of early year provisions, but if we don’t inspire the minds of the youth and raise aspirations by opening their eyes to what’s out there, we have wasted a golden opportunity.

‘Talking to people – whether that is a government minister, a supplier or an eight-year-old – and showing passion and a clear plan to take things forward is the simplest step forward for this amazing part of the world.’