Maximising social value effectively and comprehensively through procurement

Such is the theme of a new procurement policy note (PPN) recently published by the UK government.

From 1 January 2021, a new “social value model” is to be applied to all new procurements covered by the Public Contracts Regulations 2015 and carried out by UK central government departments, their executive agencies and non-departmental public bodies. The new policy builds on the Public Services (Social Value) Act 2012, which introduced a requirement for authorities in England and Wales¹ to “consider” how, when carrying out a procurement process, the procurement might improve “the economic, social and environmental well-being” of the areas under an authority’s remit. The new policy goes much further, however, by introducing a requirement to afford at least 10% of the total score available in a procurement process to social value, thereby ensuring that social value will be a “differentiating factor” in determining the outcome of the evaluation of bids.

While the PPN notes that the “overarching objective” for the UK Government’s commercial activities remains achieving the best commercial outcome, it goes on to state that “it is right that the Government applies its commissioning to supporting key social outcomes” and that “applying social value requirements in procurement can have a significantly positive impact by broadening the benefits that are delivered”.

The social value model is annexed to the PPN and lists five areas of priority focus for social value delivery. These include:

• COVID-19 recovery;
• Tackling economic inequality;
• Fighting climate change;
• Equal opportunity; and
• Wellbeing.

Associated with each priority area are policy outcomes and then delivery objectives. The delivery objectives set out to describe “what good looks like”. For example, in the context of COVID-19 recovery, the delivery objectives include, amongst others, activities that, in the delivery of the contract, “create employment, re-training and other return to work opportunities for those left unemployed by COVID-19”. Similar delivery objectives are set out for each of the other four key areas.

The PPN states that further detailed guidance on applying the model will be forthcoming, and e-training is available for procurement professionals. Comprehensive standardised information to accompany each of the outcomes in the annex, including standard award criteria, is promised.

No doubt, the devil will be in the detail. Embedding social value in government procurement, whilst undoubtedly a laudable goal and one which should be vigorously pursued, has proved to be a notoriously difficult area to navigate for many authorities, not least because of the obligation to ensure that award criteria are linked to the subject-matter of the contract in question. It will be interesting to see what further guidance is issued, and the terms of this.

The new PPN (Procurement Policy Note 06/20 – taking account of social value in the award of central government contracts) is available here.

For further information, please contact

Áine Smith, Consultant, Procurement and Projects - ainesmith@eversheds-sutherland.ie

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1. With some exceptions for certain Welsh authorities.