Procurement: love your community

Paul Long at FindItIn describes social value and explains why you should care

 

In February 2025, the UK’s new Procurement Act came into force, replacing existing legislation following the UK’s withdrawal from the EU. As part of the Act, there is a renewed focus on delivering social value in procurement - making sure that companies seeking public sector contracts are giving back and adding value to the local communities in which they operate. 

 

The Act is designed to streamline and improve public procurement while making it easier for a wide range of suppliers - including small businesses and voluntary and social enterprises - to do business with the public sector directly and through their key contractors. 

 

That means assessing contract submissions not only for the quality of service and monetary value they can offer the public purse but also for the ‘social value’ they can deliver.

 

Social value was first defined through the Public Services (Social Value) Act (2013). It required all public sector organisations and their suppliers to consider how contracts worth more than £100,000 could improve an area’s economic, social and environmental well-being. 

 

In September 2020, Public Procurement Note (PPN 06/20) shifted the onus from ‘considering’ social value to explicitly evaluating it. With the arrival of the Procurement Act last month, the significant change lies in the legal shift for public sector buyers to award contracts based on Most Advantageous Tender, rather than Most Economically Advantageous Tender. 

 

This focus will be embedded from the start of the procurement cycle, with procurers expected to identify the needs of the local community in which the contract will be delivered, before shaping how social value will be assessed in each case. In practice, this could mean prioritising job creation, community facilities improvements, or support for innovation and carbon-reduction initiatives. With the publication of PPN002: The Social Value Model (updated 5 March 2025), there is now clear guidance to help in-scope organisations implement this new approach.

 

As a result, meet-the-buyer events are likely to become a more frequent channel for procurement professionals and suppliers alike, helping them build their respective understanding of key priorities for major projects.

 

So, how will social value be measured and what does that mean for companies seeking contracts up and down the country?

 

Several companies already offer social value measurement services to procurement and suppliers, each using different metrics, so there isn’t yet a standardised playing field. Procurers are responsible for ensuring that ‘social value washing’ does not become as prevalent as ‘green washing’ has been allowed to become over recent years. 

 

That means putting checks and balances in place, with likely contractual changes including clear expectations regarding social-value reporting requirements, setting out clear KPIs to benchmark performance, and including remedies for non-delivery of social value objectives. 

 

As the Act comes into effect, it will be interesting to see how practices evolve. In some cases, we have heard of social value representing as much as 30% of tender scores - a shift that could undermine the goal of improving transparency and accessibility for smaller businesses, many of which will not have the resources required to meet overly burdensome reporting requirements.

 

But this is just one possibility. In theory at least, any organisation that employs people above the living wage, is committed to anti-slavery legislation or has a strong diversity and environmental policy, for example, should have little to fear from these changes and, perhaps, a lot to gain.

 

Research shows that organisations committed to operating responsibly and with strong community links benefit from a more reliable, motivated workforce and improved commercial performance. 

 

Thinking local and supporting the communities we operate in is a virtuous circle that benefits organisations, public bodies and local communities alike. We can all flourish by working more closely together across sector divides. 

 

---

 

Paul Long is a director at FindItIn

 

Main image courtesy of iStockPhoto.com and skynesher