Social Value

Additional social, economic and environmental benefits that public procurement can deliver beyond the core goods or services being purchased, as required by the Social Value Act 2012.

What it means

Social Value refers to the wider benefits that public procurement can generate for communities and society beyond the primary purpose of a contract. Under the Public Services (Social Value) Act 2012, public bodies must consider how their procurement decisions can improve economic, social and environmental wellbeing.

This includes benefits such as local job creation, apprenticeship opportunities, supporting SMEs and voluntary organisations, reducing carbon emissions, and addressing local priorities like skills development or community cohesion.

Legal requirements

The Social Value Act 2012 requires public bodies to consider social value before starting a procurement process. The Act applies to service contracts above certain thresholds, though many organisations extend this to all procurement activities.

Procurement Policy Note 06/20 strengthened these requirements, mandating that social value must account for at least 10% of evaluation criteria in central government procurements above £5 million.

How it works in practice

Contracting authorities typically embed social value through:

• Evaluation criteria: Scoring bidders on their social value commitments alongside price and quality
• Contract terms: Including specific social value obligations and Key Performance Indicators
• Measurement: Monitoring delivery against commitments throughout the contract period

Common social value outcomes include local employment, supply chain opportunities for local businesses, environmental improvements, and community engagement activities. The emphasis should be on outcomes that are relevant to the specific contract and local area priorities.