The new Procurement Act, set to take effect from February 2025, will transform the UK’s procurement regulations — and it’ll have a massive impact on Social Value for businesses, too.
Not sure what to expect or how the Procurement Act will affect you? You’re in the right place, because we’ve set out five key considerations for businesses when it comes to Social Value.
Far from giving you new hoops to jump through, the new Procurement Act will actually streamline the public procurement process.
As well as making public procurement simpler and more transparent, it will remove some of the barriers that have traditionally made it hard for new entrants — like small businesses, social enterprises, and voluntary organisations — to apply for government contracts.
All of which should make it easier for a wider range of suppliers to do business with the public sector – and that’s great for the Social Value movement.
While the Procurement Act doesn’t make direct reference to Social Value, it does require buyers to prioritise ‘maximising public benefit’.
Combined with the explicit mention of Social Value in National Procurement Policy Statement and legislation like PPN 06/20, many view this as reinforcing the principles of Social Value in public procurement.
However, as you will see in point 5, that’s far from the end of the story...
Under the new Procurement Act, public sector buyers will no longer award contracts to the Most Economically Advantageous Tender (MEAT). Instead, they will shift to MAT, or Most Advantageous Tender.
Of course, economic factors will remain a high priority for buyers. But they will now be able to place greater emphasis on how a contract will benefit the wider community, such as by:
All of which are fundamental elements of another key piece of Social Value-related government guidance: the Social Value Model.
💡 Learn more: The Social Value Model and PPN 06/20: The complete supplier’s guide
Transparency is a key focus of the new Procurement Act – and that will extend to Social Value delivery as well.
Firstly, it will task authorities with publishing key performance indicators (KPIs) detailing suppliers’ progress toward the commitments laid out in contracts worth over £5 million — some of which will inevitably be linked to Social Value delivery.
Additionally, it obligates buyers to various information with the public through so-called transparency notices when awarding the contract as a ‘direct award’.
All this means that when organisations and projects fail to deliver the promised Social Value impact, that information will become public. It also makes effective measurement and reporting of Social Value against contractual commitments more important than ever.
The Procurement Act was due to take effect on 28 October 2024. However, Kier Starmer’s new Labour government has pushed implementation back until 24 February 2025.
Why the change? According to the Cabinet Office, the decision was based on its ambition to:
“Create a mission-led procurement regime which builds on the transformative powers within the Act, and which meets the challenge of applying the full potential of public procurement to deliver value for money, economic growth and social value.”
So, the plan is to rewrite the previous government’s National Procurement Policy Statement (NPPS) - partially in the interests of driving greater Social Value.
💡 Learn more: How the Labour government plans to drive Social Value
With Social Value clearly high on the agenda for government procurement policy, now’s the time to make sure you’re aligned.
Want to learn more about government guidance for Social Value? From the Procurement Act to PPN 06/20, it’s all covered in our Social Value Model Resource Hub.