What Is Social Value? A Complete Guide for Public Sector Procurement

Public procurement in the UK has undergone a fundamental transformation. Recent reforms, such as the Procurement Act 2023, have brought significant changes by introducing a new procurement regime that replaces previous European-influenced legislation with a more streamlined and accessible framework tailored to domestic needs. It is no longer a straightforward exercise focused solely on securing the lowest price and highest quality for goods and services. Today, it serves as a powerful strategic lever for delivering wider societal benefits, including the improvement of wellbeing for individuals and communities. This evolution is driven by the principle of social value, which ensures that every pound of public money spent generates additional economic, social, and environmental good for our communities.

From creating local employment opportunities to reducing carbon emissions, social value embeds a sense of purpose into public spending, guaranteeing that taxpayer-funded contracts actively contribute to a better, fairer, and more sustainable society. This shift reflects a broader definition of value now considered in public sector procurement, encompassing not just financial outcomes but also social, environmental, and stakeholder impacts. This guide offers a comprehensive overview of social value in UK public sector procurement, exploring what it is, the policies that mandate it, and how digital platforms like Delta eSourcing are essential for embedding, tracking, and maximising its impact at every stage of the procurement lifecycle.

Defining Social Value in Procurement

In the context of public sector procurement, social value refers to the wider community and environmental benefits that a contract can generate, beyond the core goods or services being delivered. When evaluating bids, public buyers are now tasked with considering not just the price and quality proposed, but also how the contract’s delivery can actively improve the economic, social, and environmental well-being of society.

These benefits are often categorised under the “triple bottom line,” which provides a clear framework for understanding the different dimensions of social value. Understanding the relative importance of different outcomes helps organizations prioritize social value initiatives and allocate resources to what matters most to stakeholders:

• Economic Outcomes

• This pillar focuses on strengthening the local and national economy. A key example is a commitment from a supplier to create new apprenticeships or jobs for residents, particularly for those who are long-term unemployed. It also includes initiatives that support local supply chains by subcontracting work to small and medium-sized enterprises (SMEs) and voluntary, community, and social enterprises (VCSEs), ensuring that public money is reinvested back into the community.

• Social Outcomes

• These are initiatives aimed at improving community well-being and reducing inequality. Engaging stakeholders in identifying and delivering these community benefits is essential. This could involve a supplier committing staff time to volunteer for local projects, funding community-led initiatives, or ensuring all staff are paid the Real Living Wage. The goal is to foster stronger, healthier, and more equitable communities through the delivery of public contracts.

• Environmental Outcomes

• This dimension addresses the urgent need to protect our planet. It encompasses any effort to reduce a contract’s environmental impact, such as cutting carbon emissions by using electric vehicles, sourcing renewable energy, minimising waste through circular economy principles, or using sustainable materials in a construction project.

In essence, social value is about leveraging public spending to achieve more. A contract for cleaning services might also provide training opportunities for disadvantaged individuals. A major construction project could also include a commitment to biodiversity net gain by creating new green spaces. These additional benefits don’t happen by chance; they are the direct result of a conscious and strategic procurement decision that places social, economic, and environmental objectives at the heart of the process.

Why Social Value Matters in Public Sector Procurement

Integrating social value into procurement is far more than a legislative box-ticking exercise; it has become a strategic imperative for public sector organisations across the UK. This shift reflects a deeper understanding of the role public spending can play in shaping society for the better. Increasingly, governments are leveraging social value strategies to improve public services, promote social inclusion, and address societal challenges. Here are the key reasons why social value is no longer a “nice-to-have” but a fundamental component of modern procurement.

Firstly, it aligns procurement with clear policy mandates. The UK government has made social value a central pillar of its public spending strategy. Following the introduction of the Public Services (Social Value) Act 2012 and the transformative Procurement Act 2023, contracting authorities are now legally required to consider and prioritise social outcomes. For central government contracts, a minimum weighting of 10% must be allocated to social value during tender evaluations, signalling that it is a critical factor in decision-making.

Secondly, it meets growing public and political expectations around Environmental, Social, and Governance (ESG) goals. There is a powerful consensus that taxpayer money should be used to support national objectives, from achieving net-zero carbon targets to promoting equal opportunities and fostering community prosperity. Social value provides the mechanism to turn these aspirations into reality. By moving away from a narrow focus on the lowest price towards the “most advantageous” tender, buyers can balance cost, quality, and positive societal impact, ensuring that public contracts contribute to long-term resilience and fairness. Integrating social value into procurement leads to better decisions and more value for communities, as it incorporates broader stakeholder insights and maximizes beneficial outcomes.

Finally, delivering visible community benefits builds public trust and enhances accountability. When taxpayers can see tangible returns on their investment—such as new jobs for local people, improved air quality, or better community facilities—it strengthens their confidence in public institutions. Furthermore, social value drives greater accountability. Authorities must define their social value objectives upfront and report on the outcomes, making both the buyer and the supplier answerable for the promises made. In an era of transparency, every pound spent is an opportunity to improve well-being, and social value ensures this opportunity is seized, resulting in a positive impact on society.

Social Value UK: Key Policy Drivers and Legal Frameworks

The growing emphasis on social value in UK procurement is supported by a robust and evolving legal framework. This evolution can be traced from the Public Contracts Regulations, which were heavily influenced by the European Union, towards a new, simplified domestic approach. Two pieces of legislation, in particular, have been pivotal in this journey: the Public Services (Social Value) Act 2012 and the more recent Procurement Act 2023.

The Public Services (Social Value) Act 2012

The Public Services (Social Value) Act 2012 was a landmark piece of legislation that formally introduced the concept of social value into the public procurement lexicon. The Act placed a duty on public bodies in England and Wales to “consider” how the services they commission could improve the economic, social, and environmental well-being of their area. This prompted authorities to think beyond the core requirements of a contract and explore how they could secure additional community benefits. Organisations were required to apply social value considerations in their procurement activities, leading to the development of social value strategy and social value strategies within public sector organisations to ensure compliance and maximize community impact.

While groundbreaking, the 2012 Act was primarily a catalyst. Its “duty to consider” was a baseline obligation, and it provided limited guidance on practical implementation. This led to inconsistent adoption, with some authorities embedding social value deeply while others struggled to define, measure, and evaluate it effectively. Building organisation capability became essential to plan, manage, and deliver social value effectively. To address this, supplementary frameworks like the National TOMs (Themes, Outcomes, Measures) and the government’s Social Value Model emerged, providing standardised metrics and criteria to support more consistent application.

The Procurement Act 2023 Explained

The Procurement Act 2023 represents the most significant reform of UK public procurement in a generation. It replaces the old EU-derived rules with a new regime designed around national priorities, with social value placed firmly at its core. Several key provisions within the Act strengthen this focus considerably:

• Maximising Public Benefit:

• Section 12 of the Act introduces a powerful new duty for contracting authorities to actively “maximise public benefit.” This is a much stronger obligation than the 2012 Act’s instruction to merely “consider” social value, elevating it from a secondary thought to a core procurement objective.

• From MEAT to MAT:

• The Act shifts the basis for awarding contracts from the “Most Economically Advantageous Tender” (MEAT) to the “Most Advantageous Tender” (MAT). This subtle but profound change explicitly empowers buyers to award contracts based on a holistic view of value, which can include qualitative social and environmental factors alongside price. A bid offering significant social impact could now be deemed “most advantageous,” even if it isn’t the cheapest.

• Mandatory KPIs and Reporting:

• Recognising that promises must be delivered, the Act introduces new rules for contract performance monitoring. For contracts valued over £5 million, authorities must set and publish at least three Key Performance Indicators (KPIs). If social value was a factor in the award, relevant KPIs must be included, ensuring that commitments are tracked and managed. The Act will also require suppliers to provide data and evidence on social value delivery, supporting a more robust approach to measuring social value. Tools and frameworks are encouraged to measure social outcomes and impacts, ensuring transparency and accountability.

• Contract Requirements and the Supply Chain:

• The Act places greater emphasis on contract requirements, highlighting the role of the supply chain in delivering social value. Integrating social objectives into contractual arrangements ensures that the entire supply chain contributes to positive community outcomes.

• Implementation and Resources:

• To comply with the new requirements, organizations will need sufficient resources and the right resource and know-how to effectively plan, manage, and deliver social value in line with the Act.

• Increased Accountability:

• The new regime introduces a debarment register, allowing suppliers who fail to deliver on their commitments—including social value promises—to be barred from future public contracts. The Act also addresses key issues such as modern slavery in procurement, ensuring that ethical considerations and protections for vulnerable populations are embedded in the process. This adds real teeth to the process, ensuring social value is treated as a binding obligation, not just aspirational bid-writing.

Examples in Practice

While the policy can seem abstract, social value delivers tangible, real-world benefits. Here are some common examples of how it is being applied in UK public sector procurement.

• Local Job Creation and Skills Development

• A construction tender for a new community centre could require the winning contractor to hire a specific number of apprentices from the local area. This not only helps reduce local unemployment but also equips young people with valuable skills and qualifications, boosting their long-term career prospects and supporting the economic resilience of local communities.

• Carbon Footprint Reduction

• A facilities management contract for a local council could include a social value requirement for the supplier to reduce the contract’s carbon emissions by 20% over two years. This might be achieved by switching to an electric vehicle fleet, installing energy-efficient lighting, and sourcing 100% renewable electricity. Local authorities are increasingly leveraging procurement to deliver social value, using their purchasing power to drive environmental sustainability and community well-being.

• Community-Led Initiatives

• A supplier providing IT services to a government department might commit to volunteering staff time to run digital skills workshops at a local library or sponsoring a coding club for young people in a disadvantaged area. These initiatives strengthen the community fabric and improve residents’ quality of life. Community support is essential in delivering social value, as engaging local communities fosters greater impact and sustainability.

• Diverse Supply Chains

• A major infrastructure project could mandate that 25% of the subcontracting spend must go to local SMEs or social enterprises. This helps smaller, diverse businesses to grow and ensures that a greater proportion of the economic value from large government contracts is retained within the local community. Partnerships and collaboration in procurement are key to create social value and inclusive economic growth.

For example, the London Borough of Waltham Forest has implemented innovative social value initiatives through its procurement strategies, resulting in local economic impact, job creation, and environmental benefits. Many London boroughs have developed comprehensive social value strategies, reporting on outcomes and setting strategic goals to address the needs of their local communities. Social entrepreneurs and innovative suppliers play a vital role in creating social value by developing solutions that address societal challenges and generate positive community outcomes.

Real-Life Examples from UK Tenders

• Local Council Regeneration Project: A city council tendering for a town-centre redevelopment project included a 15% weighting for social value. The tender process required suppliers to demonstrate their social value commitments, and highlighted the important role of the private sector in delivering social value outcomes. The winning developer, with a strong social value track record, committed to ensuring at least 30% of the project’s workforce were local residents, offering dozens of apprenticeships in construction trades, and subcontracting landscaping and supplies to several local SMEs. The project not only delivered new infrastructure but also created jobs, boosted the local economy, and achieved significant social value benefits for the community.
• Central Government IT Contract: A central government department put a significant weighting on social value for a large IT services framework, focusing on environmental sustainability. The tender required suppliers to provide evidence of their social value commitments and strong social value performance. The successful supplier proposed a comprehensive carbon reduction plan, including transitioning its data centres to renewable energy and deploying energy-efficient hardware. They also committed to a programme of coding workshops in local schools, ensuring the contract delivered both environmental and educational social value benefits.

How Public Sector Buyers Can Embed Social Value in the Tender Process

For public sector buyers, successfully embedding social value begins long before a tender is published. It requires a strategic approach that integrates social objectives at every stage of the procurement lifecycle. By planning carefully and communicating clearly, buyers can guide the market to deliver meaningful and relevant outcomes.

The process should start early, during the pre-procurement phase. Engaging with internal departments, community representatives, and potential suppliers can help identify the social value priorities that are most impactful for a specific contract. At this stage, it is important to secure support from both internal and external stakeholders to ensure alignment and commitment to social value objectives. This allows buyers to build clear, relevant objectives into the tender documents from the outset. Rather than asking vague questions, specifications should be precise and outcome-focused, for example: “How will you contribute to reducing youth unemployment in our borough as part of this contract?”

Assigning a clear evaluation weighting to social value is crucial. Central government mandates a minimum of 10%, but many public bodies assign a weighting of 10-30% to signal its importance. This makes social value a competitive differentiator, encouraging suppliers to develop innovative and credible proposals. To ensure fairness and transparency, buyers should publish detailed scoring criteria that reward realistic, high-impact solutions, levelling the playing field for SMEs who may offer targeted, quality outcomes over sheer quantity. Asking for detailed delivery plans and using established frameworks like the Social Value Model can further strengthen the evaluation process, ensuring that promises are backed by a credible strategy and that the supply chain is actively involved in achieving social value objectives.

Collaboration is key throughout the process, and engaging stakeholders ensures that diverse perspectives are considered and that social value initiatives are relevant and effective. Building capacity to deliver social value also requires the right organisation structure and sufficient resources to plan, manage, and monitor outcomes effectively.

How Suppliers Can Demonstrate and Deliver Social Value

For suppliers, social value has become a critical component of a winning bid. Those who can authentically demonstrate their commitment to creating positive societal impact will have a significant competitive advantage. The key is to move beyond generic statements and develop a bespoke social value offer that is specific, measurable, and aligned with the buyer’s priorities. It is essential that the organisation has the right resources and resource in place to deliver on these commitments, ensuring the capability and know-how to achieve meaningful outcomes.

The first step is research. Before writing a bid, suppliers should thoroughly review the contracting authority’s strategic plans, social value policies, and community priorities. This allows them to tailor their offer to address the specific needs of the area. A proposal that directly supports a council’s net-zero targets or a local health trust’s well-being initiatives will always resonate more strongly with evaluators. Leveraging available resources, both financial and non-financial, can further enhance the impact and sustainability of the proposed social value activities.

When crafting the response, commitments should be SMART (Specific, Measurable, Achievable, Relevant, and Time-bound). Instead of saying “we will support the community,” a stronger bid would state: “We will create 10 new apprenticeships for local young people over the two-year contract, leading to certified qualifications.” Backing up these promises with a clear delivery plan, evidence of past success, and quantifiable metrics using frameworks like the National TOMs to measure social value will give evaluators confidence that the proposal is both credible and deliverable.

How to Quantify and Evidence Impact

Quantifying social value is essential for demonstrating its impact. Measuring social value requires robust frameworks and tools that help organizations measure social outcomes and impacts effectively. Frameworks like the National TOMs (Themes, Outcomes, Measures) provide a standardised library of metrics with proxy monetary values, allowing suppliers to calculate the social value of their commitments (e.g., “Our 10 apprenticeships equate to £Y in social value”). These frameworks also help organizations understand the relative importance of different outcomes, enabling them to prioritize efforts based on what matters most to stakeholders. Another methodology, Social Return on Investment (SROI), calculates a ratio of return, such as £3 of social value created for every £1 invested. Using these tools, alongside clear KPIs, provides robust, evidence-based proof of the value being delivered.

Measuring, Monitoring, and Reporting Social Value

Once a contract is awarded, the focus must shift to delivery. The Procurement Act 2023’s emphasis on transparency and accountability means that measuring, monitoring, and reporting on social value commitments is no longer optional. Measuring social value throughout the contract lifecycle is now a key requirement. A robust contract management process is essential to ensure that the promised benefits are realised and that progress is tracked transparently. Buyers increasingly require suppliers to report on social value delivery, ensuring that commitments are met and validated.

At the start of the contract, the agreed-upon social value commitments should be translated into a clear set of Key Performance Indicators (KPIs) and written into the contract. These KPIs, such as “number of apprentices hired” or “tonnes of CO₂ saved,” become the basis for performance monitoring. The contract should specify regular reporting intervals—typically quarterly or biannually—to ensure momentum is maintained and any challenges are addressed early.

Technology plays a vital role in this process. Digital contract management tools, such as those provided by Delta eSourcing, allow buyers and suppliers to track progress against KPIs in real-time through a centralised dashboard. This not only streamlines the reporting process but also creates a transparent system and audit trail of all performance data. However, organisations must ensure they have sufficient resources and the right resource in place to support effective monitoring and management. Regular review meetings should supplement this data, providing an opportunity for collaborative problem-solving and ensuring that social value delivery remains a shared priority throughout the contract’s life.

Social Value and the Future of Public Sector Procurement

Social value is now deeply embedded in UK public procurement, and its influence is set to grow. Looking ahead, several trends will shape its evolution. Governments are increasingly adopting social value strategies to achieve national goals, using procurement as a lever for broader societal benefits. We will see deeper integration with broader Environmental, Social, and Governance (ESG) objectives, with procurement becoming a key tool for achieving high-level national goals like Net Zero. The shift to the “Most Advantageous Tender” mindset will continue, empowering buyers to prioritise long-term community impact over short-term savings.

There will also be a greater focus on empowering SMEs and VCSEs to participate in public contracts, as these organisations are often powerful engines of local social value. Technology and data will play an increasingly important role, with AI and advanced analytics helping organisations make better decisions and deliver more value by predicting, measuring, and enhancing social value outcomes. Ultimately, the future of public procurement is one where delivering positive social impact is as fundamental as delivering the service itself, transforming it into a key driver of national well-being. Having a clear social value strategy will be essential for organisations to maximise their impact and adapt to evolving expectations.

How Delta eSourcing Helps You Embed Social Value at Every Stage

Achieving meaningful social value requires not only the right strategy but also the right tools. Delta eSourcing provides a comprehensive, end-to-end platform designed to help public sector buyers seamlessly incorporate, evaluate, and monitor social value throughout the entire procurement lifecycle. The platform offers the resources and resource needed to deliver social value, supporting organisations regardless of their existing capabilities.

• Strategic Tender Planning

• Delta’s Tender Management module allows you to build social value directly into your tender templates, with custom questions and specific weightings, ensuring consistency and alignment with your strategic goals from the very beginning. The platform equips you with the resources to create community benefits and support sustainability.

• Seamless Evaluation

• Our platform streamlines the evaluation process with a secure online portal where evaluators can score social value responses against pre-defined criteria. The system automatically calculates weighted scores, providing a fair, transparent, and fully auditable trail of the decision-making process.

• Robust Contract Management

• With Delta’s Contract Manager, you can translate social value promises into contractual KPIs. The platform’s live dashboards allow you and your suppliers to track performance in real-time, ensuring that commitments are delivered and creating a shared evidence base for reporting. Delta eSourcing supports users in measuring social value and provides tools for measuring social outcomes, making it easier to validate and report on social value delivery.

• Audit Trails and Compliance

• In an era of heightened scrutiny, Delta provides complete peace of mind with a full audit trail of all procurement activities. Every score, comment, and KPI update is logged, ensuring you can demonstrate compliance with the Procurement Act 2023’s requirements for transparency and accountability. Delta eSourcing helps create a transparent system for procurement, enhancing accessibility and openness.

By leveraging Delta eSourcing, public sector organisations can move social value from a noble intention to a managed, measurable, and impactful reality.

Ready to maximise the public benefit of your procurement? Book a demo to see how Delta eSourcing can help you embed social value at every stage, or contact us to get advice from a procurement expert.