What is social value in UK public sector procurement?

Social value in UK public sector procurement refers to the additional economic, environmental and social benefits that organisations must consider when buying goods and services, as required by the Public Services (Social Value) Act 2012.

Definition and Legal Foundation

Social value in UK public sector procurement refers to the additional economic, environmental and social benefits that organisations must consider when buying goods and services beyond the core contract deliverables. This concept became a legal requirement through the Public Services (Social Value) Act 2012, which mandates that public bodies must consider how their procurement activities can improve the economic, social and environmental wellbeing of their local areas.

The Three Pillars of Social Value

Social value encompasses three key areas. Economic benefits include creating local employment opportunities, supporting small and medium enterprises (SMEs), developing local supply chains, and providing apprenticeships or skills training. Social benefits involve improving community cohesion, tackling inequality, enhancing health and wellbeing outcomes, and supporting vulnerable groups. Environmental benefits focus on reducing carbon emissions, minimising waste, promoting sustainable practices, and protecting biodiversity.

Legal Requirements and Implementation

Under the Act, contracting authorities must consider social value at the pre-procurement stage for services contracts above certain thresholds. The Cabinet Office's Procurement Policy Note 06/20 strengthened these requirements, mandating that social value must account for at least 10% of the evaluation criteria in central government procurement. This policy introduced a national framework with specific themes including tackling climate change, improving supplier diversity, and creating new businesses and jobs.

Practical Application in Procurement

Public sector organisations typically implement social value through various mechanisms. During the procurement process, they may ask suppliers to demonstrate how their proposals will deliver social value outcomes, often requiring specific commitments such as employing local people, offering apprenticeships, or reducing environmental impact. Many authorities use the National TOMs (Themes, Outcomes and Measures) framework to standardise measurement and ensure consistent reporting of social value delivery.

For guidance on incorporating social value into your procurement processes, visit our social value procurement guidance pages.