As of 24 February 2025, public procurement in England, Wales, and Northern Ireland is now governed by the Procurement Act 2023, bringing significant changes for both contracting authorities and suppliers.
Although public procurement directs hundreds of billions in taxpayer money each year, it doesn’t always receive the attention it deserves. Every public pound spent is an opportunity to contribute to the wellbeing and sustainability of our society – in other words, to unlock Social Value.
That’s why the Procurement Act 2023 is such an important milestone. It strengthens the role of Social Value in procurement decisions, not only at the evaluation stage but across the entire contract lifecycle.
In this breakdown, we explore what the Act means for you in terms of Social Value, whether you’re a buyer or a supplier.
Table of contents
- Social Value legislation: A quick history lesson
- What is the Procurement Act 2023
- How the Procurement Act 2023 will unlock Social Value across the supply chain
- Contracting authorities: Social Value requirements under the Procurement Act 2023
- Suppliers: Winning work and demonstrating delivery under the Procurement Act 2023
- Don't know where to start with measuring Social Value?
- What's next? The future of Social Value in procurement
📖 Read: The Procurement Act 2023
Social Value legislation: A quick history lesson
Before exploring the Procurement Act 2023, let’s look at the legislative journey that brought Social Value to the forefront of public sector procurement.
The Public Services (Social Value) Act 2012
The first major milestone came with the Public Services (Social Value) Act 2012. This law required public sector buyers to go beyond cost and quality when evaluating bids and to ‘consider’ Social Value in procurement decisions.
Social Value refers to the additional good an organisation does for society beyond its bottom line, such as:
- Upskilling the workforce and creating apprenticeships
- Sourcing goods and services locally
- Environmentally friendly practices, such as reducing carbon emissions or improving energy efficiency
However, the Act lacked specific guidance on how to define, measure, or track Social Value, at either the evaluation stage and across the full contract lifecycle. As a result, implementation was inconsistent, and many procurement teams struggled to apply Social Value in a meaningful way.
This gap was filled by the creation of the Social Value TOM System™ in collaboration with the National Social Value Taskforce, which gave authorities a standardised system for measuring and reporting on Social Value.
PPN 06/20 and the Social Value Model
A significant shift occurred in June 2020, when the UK Government introduced:
- Procurement Policy Note (PPN) 06/20: Requiring all central government departments, executive agencies, and non-departmental public bodies to apply a minimum 10% weighting to Social Value in tender evaluations.
- The Social Value Model: A structured framework providing in-scope authorities with guidance on how to evaluate and incorporate Social Value at the tender stage.
Preparing for the Procurement Act 2023
In the lead-up to the go-live date for the Procurement Act 2023, both the Social Value Act and the Social Value Model were updated to better align with terminology under the new legislation and the new National Procurement Policy Statement.
📝 Read: PPN 003 – Social Value Act
📝 Read: PPN 002 – Social Value Model
What is the Procurement Act 2023?
Following the UK’s departure from the European Union, the Government needed to establish a new procurement regime tailored to domestic priorities.
Historically, public procurement has been governed by strict and tightly regulated processes designed to ensure fairness, transparency, and value for taxpayers. However, procurement teams have often been left feeling restricted, with limited ability to design contracts that deliver strategic outcomes, including Social Value.
The Procurement Act 2023 introduces a simpler, more transparent system with improved accessibility for SMEs and VCSEs.
The Procurement Act 2023 is the biggest change we’ve had in procurement in over 30 years. We’re now stepping away from European-derived legislation that we’ve been very used to, and moving into a different environment.
Clive Higgins, UK Chair and CEO of Leonardo at the Social Value Conference 2024
How the Procurement Act 2023 will unlock Social Value across the supply chain
Originally set to take effect in October 2024, the Labour Government delayed implementation of the Act to February 2025 to allow for a smoother transition and to introduce a new National Procurement Policy Statement (NPPS).
The NPPS, released alongside the Act in February 2025, serves as a strategic guide for contracting authorities, reinforcing Social Value as a core priority in public procurement and aligning with Labour’s ‘5 Missions’.
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🔗 Read: Aligning your business with the Labour 5 Missions
So, how exactly do the Act and the NPPS strengthen Social Value requirements? Here are the key changes you need to know about:
Social Value in the National Procurement Policy Statement (NPPS)
Although the National Procurement Policy Statement is separate from the Procurement Act 2023, authorities are legally required to “have regard” to it under Section 13 of the Act.
The NPPS makes Social Value a clear priority and reinforcing its role in government procurement strategy in a few ways:
Mission-driven procurement
The NPPS directly aligns with the Government’s 5 Missions, stating that “contracting authorities should deliver social and economic value that supports the Government’s missions.” This formalises the expectation that procurement decisions actively contribute to long-term national priorities related to Social Value.
A place-based approach
Social Value has always been about meeting the unique needs of local communities. The NPPS reinforces this by stressing the importance of “taking into account priorities in local and regional economic growth plans.” This means authorities must procure in a way that supports the specific economic and social needs of the communities they serve, rather than applying a one-size-fits-all approach.
Contract management and delivery
Like the Procurement Act 2023, the NPPS emphasises not just awarding contracts based on Social Value commitments, but ensuring they are actually delivered. It explicitly states that authorities should:
- Benchmark their procurement capability to ensure they have the skills and capacity to manage contracts effectively
- Prioritise long-term value for money, which includes Social Value delivery
💡 Read: Is the new NPPS a step forward for Social Value?
Authorities must “have regard to maximising public benefit”
Under Section 12 of the Procurement Act 2023, contracting authorities must "have regard to the importance of maximising public benefit" when awarding contracts. This represents a major shift from the Social Value Act 2012, which only required authorities to "consider" Social Value.
This change places a greater legal obligation on procurement teams to ensure public contracts deliver measurable social, economic, and environmental benefits. As procurement expert Darren Knowd notes:
The Social Value Act says there is a duty to consider Social Value, which is a very light, low-level responsibility. With the new National Procurement Policy Statement, procurers will need to ‘have regard to’ certain priorities set out, which is a much higher legal test than ‘consider’. It means you have to unless you have a good reason not to.
Darren Knowd, Chief Executive of DRKNOWD at the Social Value Conference 2024
From MEAT to MAT: A broader definition of ‘value’
For years, public contracts were awarded to the “Most Economically Advantageous Tender” (MEAT) under the Public Contracts Regulations 2015.
However, Section 19 of the Procurement Act 2023 updates this principle, allowing authorities to award contracts based on the “Most Advantageous Tender” (MAT) instead.
This change empowers authorities to take a broader view of value and base procurement decisions not just on cost, but on Social Value benefits like:
- Local job creation and apprenticeships
- Sustainability and environmental impact
- Supplier diversity and SME participation.
From targets to delivery: Stepping up transparency and reporting
The Procurement Act 2023 isn’t just about prioritising Social Value at the tender stage. It also strengthens accountability and transparency by requiring:
- Authorities to set and publish at least three Key Performance Indicators (KPIs) for all £5 million+ contracts
- Where KPIs for Social Value are used, annual reviews to assess whether suppliers are delivering on their Social Value commitments
- Public reporting on supplier performance, meaning Social Value failures will be visible to stakeholders where KPIs are used to measure Social Value performance
Public debarment a risk for suppliers that don’t deliver
Additionally, the Act introduces stronger consequences for suppliers that fail to deliver on their commitments.
This includes a public debarment list, which will exclude suppliers with a record of unethical behaviour or persistent non-delivery from securing future government contracts.
SMEs & VCSEs: New opportunities in public procurement
A top priority of the Procurement Act 2023 is making public contracts more accessible to small-medium enterprises (SMEs) and Voluntary, Community, and Social Enterprises (VCSEs).
The Act introduces several measures to break down barriers for SMEs and VCSEs, including:
- A duty on contracting authorities to remove unnecessary obstacles that prevent smaller organisations from bidding.
- Mandatory 30-day payment terms across public sector supply chains to improve cash flow for SMEs and VCSEs.
Moreover, the NPPS mandates new spending targets:
- ‘In scope’ authorities must set spend targets for SMEs and VCSEs
- Central government departments must:
- Set a 3-year SME spend target (by April 2025)
- Set a 2-year VCSE spend target (by April 2026)
- Report results annually
These measures aim to diversify public sector supply chains and strengthen local economies, which will inherently create Social Value.
🔗 Read: PPN001 – Spend with VCSEs and SMEs
Contracting authorities: Social Value requirements under the Procurement Act 2023
If you’re a contracting authority, then the Procurement Act 2023 does two key things:
- It empowers you to ask for more from your suppliers
- It introduces new legal responsibilities to ensure commitments are actively delivered
Here’s how you can maximise Social Value from your supply chains while aligning with Government policy objectives:
Engage suppliers early through preliminary market engagement
The Act places greater emphasis on early market engagement. Specifically, it gives suppliers visibility of upcoming opportunities and allows authorities to shape tenders in collaboration with the market.
Here are some effective tools for preliminary market engagement:
- Meet the buyer events: Introduce suppliers to upcoming tenders and clarify your Social Value expectations.
- Request for Information (RFI) or Prior Information Notices (PINs): Assess market capacity and gather insights into the supply base before drafting your tender.
- Supplier questionnaires and surveys: Understand supplier capabilities and potential barriers.
- Local Needs Analysis: Conduct data-driven research into community challenges and provide suppliers with access to the information to help them refine their bids.
Finally, authorities should be clear at tender stage about the importance placed on Social Value through the evaluation weightings applied.
Early market engagement has always been best practice, but has not always been the practice. I think having the opportunity to speak to suppliers really early on will help them to shape the requirements and lead to better outcomes.
Lee Jackson, Managing Director at North-West London Procurement Services at the Social Value Conference 2024
💡 Tip: Create and publish a Social Value Policy to guide bidders!
Balance cost with long-term public benefit in evaluations
The shift to Most Advantageous Tender, and the NPPS’s emphasis on “long-term” value aligned with “local and regional growth plans”, lets authorities prioritise social, economic, and environmental benefits when awarding contracts.
This is an invaluable opportunity to design and award contracts that tackle the specific needs of the community in which the project will be executed.
Example: if your community lacks greenspace or employment opportunities for young people, you can use the MAT criteria to award the contract to a bidder with a stand-out plan to tackle these challenges through rejuvenation of local parks and creation of apprenticeships.
Set clear and enforceable Social Value targets
A key challenge in procurement has been consistently tracking Social Value commitments as they become real world impact. The Procurement Act 2023 addresses this by introducing higher transparency and reporting standards.
To meet the requirements of the Act, authorities should:
- Set and publish at least 3 KPIs in contracts over £5m through a Contract Details Notice. As a key policy priority, it’s likely that many (if not most) contracting authorities will include a KPI to measure delivery of Social Value.
- Monitor supplier performance annually to assess, where a relevant KPI has been included, Social Value delivery
- Report on progress publicly to create transparency in procurement outcomes
- Enforce contractual obligations, using penalties, deductions, or termination for non-delivery of Social Value commitments
If you are asking for anything at the procurement stage, and you are turning it into a differentiator, put it in your contract terms and make it stick through the commercial lifecycle... If the only reason someone has won a contract is on the basis of its Social Value response, then make sure that they can lose the contract for failure to deliver that, or reimburse you.
Rebecca Rees, Head of Public Procurement at Trowers & Hamlins at the Social Value Conference 2024
💡 Explore: The Cabinet Office’s Transforming Public Procurement Knowledge Drops
Build capability to deliver Social Value
The National Procurement Policy Statement makes clear that building capability is a key priority, stating:
“Contracting authorities should ensure the right commercial capability and standards are in place to procure and manage contracts effectively and to collaborate with other contracting authorities to deliver best value.”
So, if your organisation lacks the resource or know-how to plan, manage and deliver Social Value, now’s the time to make some changes. You should consider:
- Investing in staff training on Social Value
- Developing internal processes to track and manage Social Value commitments
- Collaborating with Social Value experts
Suppliers: Winning work and demonstrating delivery under the Procurement Act 2023
With the new Central Digital Platform and increased transparency in procurement opportunities, suppliers have more chances than ever to align their bids to local needs and respond effectively to authorities’ Social Value priorities.
However, the Act also strengthens supplier accountability. Authorities now have greater powers to exclude or penalise suppliers for poor performance or unethical behaviour.
Here’s what suppliers need to do to win contracts and stay compliant under the Act:
Engage early with buyers
The Act mandates greater transparency in procurement pipelines through transparency notices, giving suppliers better visibility of upcoming opportunities.
Stay ahead by:
- Tracking authorities’ pipelines and upcoming tenders
- Engaging early to align to Social Value priorities before bids are published
- Attending meet the buyer events and researching authorities’ Social Value objectives
Make clear Social Value commitments in bids
To stand out, make your Social Value bids:
- Aligned to documented community needs and authority priorities
- Specific, measurable and time-bound, with metrics (e.g., 20 apprenticeships created over two years)
- Clearly attributable to the scope of the contract
- Over and above your day-to-day activity and the core requirements of the contract
- Realistic, with clear metrics to track delivery
💡 Give yourself a winning chance with extra bid support
Prepare for increased scrutiny and reporting obligations
Under Section 68, authorities must publish at least three KPIs for large contracts, which will likely require suppliers to regularly report on Social Value performance. This will mean consistently tracking your Social Value KPIs and establishing robust data gathering and reporting processes.
But it’s not all stick – there’s a carrot too. Under the new regime, a strong Social Value track record, underpinned by published data, will have a competitive advantage for future tenders.
Don’t know where to start with measuring Social Value?
As transparency expectations increase, organisations must be able to reliably measure and report on Social Value – both their own and that of their suppliers.
The Social Value TOM System™ is the most widely used standard for quantifying and reporting Social Value. It provides a comprehensive, standardised set of proven Social Value activities, with each assigned a monetised ‘proxy value’ based on the latest Government data.
This takes the hard work out of creating trackable Social Value metrics in tenders, bids and contracts.
Plus, all data publicly reported using the TOM System undergoes third-party validation – ensuring transparent, accurate reporting to avoid greenwashing or social-washing claims.
Adrian Williams, from London Borough of Waltham Forest, on third-party validation
💡 Explore: Why we validate Social Value reporting
The Social Value Model vs the TOM System™
The Social Value Model provides guidance to central government buyers on evaluating Social Value bids. It only applies to the tender stage, uses qualitative criteria, and does not ‘measure’ Social Value or track delivery.
The TOM System and the Social Value Model are fully aligned and, when combined, provide a complete view of Social Value impact.
Serco's Impact Manager Lulu Hobbs on the TOM System and the Social Value Model
What’s next? The future of Social Value in public procurement
The Procurement Act 2023 is the beginning of a new era for Social Value in procurement. If you want to get ahead, you can start building your strategy using the Open Access TOM System – a free to access tailored set of Social Value measures:
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