Social Value in UK Public Procurement - The Mindset Shift

True value for money, a useful tool or an inconvenience to the whole process?

Is it worth it?

What is Social Value?

Social Value / Community Benefits got you head scratching?

First of all, Social Value in the UK (or Community Benefits in Scotland) is a major factor in the process for both buyers and suppliers to the Public Sector. With the issue of the New Procurement Act and Procurement Policy Note 002 (PPN 002) for England, Wales and Northern Ireland as well as existing Procurement Reform (Scotland) Act 2014 for Scotland, it's easy to get confused over what they all require!

Let's have a look at the current requirements:

England, Wales, Northern Ireland and UK wide procurements (e.g Home Office for the whole of the UK)

WHO: From 24th Feb 2025, this falls under the new Procurement Act 2023 and the applicable PPN 002 (1) and is applicable to "all central government departments (departments), executive agencies and non-departmental public bodies and are referred to as ‘in-scope organisations'". It also states other contracting authorities are welcome to follow the approach if they choose.

WHAT: PPN 002 mandates a minimum weighting for social value of 10% of the total scores available (or equivalent) for any in scope organisations. Other contracting authorities are likely to have internal policies on what scoring they use.

Scotland

WHO: All public contracting authourities as deemed in the schedule (2)

WHAT: Authorities must CONSIDER Community Benefits to form part of a Procurement when spend is above £4 million and report on what community benefits are delivered as part of contracts if their total spend is over £5 million per year. As part of their respective wider Procurement Strategies, many organisations will look to apply these to lower level contracts as a matter of good practice.

What does this mean for me?

Buyers

Buyers are under a lot of pressure from legislative requirements,media scrutiny, public opinion and financial budgets to show the best use of public funds in their procurements. A good way to do this is to drive bidders to deliver more transparent value through contracts with a greater emphasis on the overall score. Whilst a 10% score may be around the average, contracts likely to be highly scrunitised or controversial (e.g. major infrastructure changes) may end up with very significant Social Value weightings such as 20-30%.

Buyers need measureable and deliverable outcomes and a process to work this into their procurements without undermining the procurement. Therefore many look to use streamlined systems such as the National TOMs (Themes, Outcomes, Measures) Framework. This gives a more straightforward comparison of suppliers offers and means it's easier to score.

Suppliers

On the flip side, suppliers can often feel burdened by these requirements. Thoughts such as "How do I deliver this?" "Oh God, another cost to lump in" or even "They just want something for nothing" aren't uncommon!

As a supplier, you need to appreciate that your offering doesn't end at contract award and not just "might pop up" in future. These form real contractural obligations and can have serious repercussions for your business - legally, financially and reputationally.

Therefore you need to make sure any commitments have the sign off and backing of senior management who can make sure the resources are made available to deliver. For smaller organisations this could be the Director(s) with larger organisations employing a Social Value Officer as a liasion between the client and the C-Suite.

Common Problems

Social Value can lead to headaches for both buyers and suppliers!

• Application of a standard set of requirements for quickness (such as TOMs) without regard to the nature of the contract can make it difficult to deliver - e.g. Remote IT Services being delivered in one region but expecting local employment.

• Suppliers worry about the commerical impact of their offering and work the cost into the overall commercials raising the costs to the Buyers and giving an illusion of value.

• Deliverables are too varied per client to track and reporting becomes more strenuous on the business.

• Commitments are forgotten about and become a rush at the end of a project to deliver for both sides.

• Management is handed to remote or offshore teams as an "admin" task leading to lack of local involvement / community interaction.

The Mindset Shift

It's time to change our mindsets

A key problem is the mindset of how both buyers and suppliers appear to approach this area of procurement. By working to actively change some of our existing views, we can greatly enhance what is offered and what is delivered in public contracts.

Let's look at some potential mindset shifts:

Role	Existing Mindset	New Mindset
Buyer	Fire out the standard response template from strategy for every procurement.	Using the strategy as a guide, engage suppliers before tender to find out what areas would be difficult for any to supply.
Buyer	Only ever use one score (e.g. 10%).	Consider what this procurement means for you and your clients, adjust the scoring ratio to suit. If it's crucial to your community, it should be a bigger factor!
Buyer	Expect supplier to supply all reporting with no support.	Engage the contractor earlier with your own SV team to streamline reporting processes and admin.
Supplier	Fire out the same response - "It worked before"	Most Buyers will publish their SV objectives or make them known through clarification. Research what their targets are and think how you can help this.
Supplier	Form response in isolation without local engagement.	Speak to people! If you have local employees or suppliers, get their thoughts and local knowledge. Each community is different and the people that stay there know it best.
Supplier	File the commitments away under a future Admin task.	Start early and get your employees engaged. You'll be surprised how many people like the thought of helping in a community.

A New View

Social Value has the strength to draw communities together

At Princeps, we truly believe that Social Value is a key part of public procurement and can lead to real gains for buyers, suppliers and communities at large. By working to change our mindsets all around about how we approach the subject, businesses can grow better within local economies and nuture real communities.

If you are a buyer or supplier considering your next Social Value / Community Benefit plan, get in touch and we'd love to help!

References -

All hyperlinks correct at time of publishing.