At Thrive, we’ve talked many times about what social value is, how it should be measured and reported on, and how businesses can win more public contracts by understanding it better.
But until now our blogs have touched little upon the history of social value, how it’s changed over the years, and where it’s heading. So it’s about time we corrected that!
The Public Services (Social Value) Act 2012
The story begins with the “Social Value Act” – or to give it its full name, the Public Services (Social Value) Act 2012.
It began life as a Private Member’s Bill brought forward in 2010 by MP Chris White, who, as a councillor, had seen how community-focused initiatives were unable to compete in contract processes that were usually decided on price.
Professor White (as he now is) built cross-party support for his reforms by keeping things simple, open to wide interpretation, and short (just 1,151 words!).
The key subclauses are as follows. In awarding certain contracts:
1.3 The authority must consider—
- how what is proposed to be procured might improve the economic, social and environmental well-being of the relevant area, and
- how, in conducting the process of procurement, it might act with a view to securing that improvement.
Speaking in March 2022, Professor White explained:
“What is now known as the Social Value Act was about cultural change. By allowing all public bodies to consider the added social, economic and environmental wellbeing that could be created through commissioning services, public bodies could take a much broader view of how they spend their money.”
The 2015 Young Review
In February 2015, the former Cabinet Minister Lord Young published a comprehensive review of the Act’s performance to date. Its executive summary stated:
“We found that, where the Act is being used, it has a positive impact and that the variety (if not yet the number) of organisations that support the Act is quite striking.”
However, it also noted three barriers to taking social value further at the time:
- Awareness and take-up of the Act is a mixed picture.
- Varying understanding of how to apply the Act can lead to inconsistent practice, particularly around:
- knowing how to define social value and how and when to include it during the procurement process
- applying social value within a legal framework and procurement rules
- clarifying its use in pre-procurement.
- Measurement of social value is not yet fully developed.
At the time, social value was largely being measured in terms of Social Return on Investment (SROI) – an earlier framework commissioned by the Office of the Third Sector within the Cabinet Office.
One important consequence of the Young Review was the decoupling of the social value consideration duty from the thresholds for listing contracts in the Official Journal of the European Union (OJEU), which was soon set to rise dramatically. This was enshrined in the Public Contracts Regulations 2015.
When Professor White conducted a second review in 2017 (entitled “Our Money, Our Future”), £25 billion of public spending was influenced by the Social Value Act.
PPN 06/20 and The Social Value Model
Five years later, in 2022, that figure had risen to around £100 billion – according to Social Enterprise UK.
Why?
Surely the biggest single factor since the Act itself was the introduction of one Procurement Policy Note in September 2020: PPN 06/20.
As we’ve discussed at length in other blogs, PPN 06/20 dramatically changed the way that central government bodies, their executive agencies and NDPBs were required to think about social value. Rather than simply being asked to “consider” it:
“Application of the model will be mandatory … A minimum weighting of 10% of the total score for social value should be applied in the procurement to ensure that it carries a heavy enough score to be a differentiating factor in bid evaluation; a higher weighting can be applied if justified.”
The Social Value Model in question followed in December 2020, spelling out in detail just how the system should work and how social value should be understood across five themes. We’ve written blogs explaining fully each of the five themes and how to apply them :
- Tackling economic inequality
- Fighting climate change
- Equal opportunity
- Wellbeing
- COVID-19 recovery (no longer widely used)
PPN06/20 came into force on January 1, 2021.
Around the same time, the government published a Green Paper, entitled “Transforming Public Procurement”, which set out how procurement would be reformed further in the light of the UK’s departure from the EU earlier in 2020.
This set the stage for the Bill that would eventually become the Procurement Act 2023.
The Procurement Act 2023
Brexit was the driving force behind the introduction of the Procurement Bill in May 2022.
New laws were needed to replace those relating to EU procurement rules that were to be invalidated at the end of the Transition Period. As minister Lord Agnew said at the time, this necessity offered a chance “to overhaul our outdated public procurement regime”.
While the Bill went a long way to achieve that, social value enthusiasts’ high hopes were initially dashed by the complete absence of the term “social value” from the version put before Parliament in May 2022.
Nevertheless, several important changes introduced in the Bill were supportive of social value as practiced to that point:
- Public procurement decisions would no longer be made on the basis of “Most Economically Advantageous Tender” (MEAT) but rather “Most Advantageous Tender” (MAT). This opens things up for authorities and bidders to be more creative in how they take account of social value, sustainability, and other public goods
- The Act also toughens up monitoring of delivery against contract specifications and requirements for feedback on bids – including social value undertakings
Campaigning took place inside and outside Parliament to get social value onto the face of the Bill. In evidence submitted on the Bill, NCVO, the Charities Aid Foundation, and a host of voluntary sector bodies warned:
“The change in language to assessing for the MAT will not be sufficient to change practice and culture. Further clarity and expectations are needed so that assessing the MAT includes placing more emphasis on the importance of social value and recognising the different ways this can be delivered.”
The Bill took a long time to make it through the legislative process, receiving Royal Assent as the Procurement Act 2023 on 23 October 2023.
Following the election of a Labour government in July 2024, implementation of the Act was delayed from the end of October to 24 February 2025 – pending revisions to the National Procurement Policy Statement (NPPS).
The NPPS and PPN02
In early February 2025, we were still waiting for the NPPS to be published – despite consultations having ended three months earlier.
And then on February 13th it landed… and it wasn’t alone.
I came with a new Social Value Model – under the title “PPN 002: Taking account of social value in the award of contracts”.
Let’s look at the two documents in turn.
The NPPS is a statutory requirement under the Procurement Act, intended to spell out national priorities for public procurement that in-scope organisations must “have regard to”.
The first such NPPS – published in May 2024 – set the following priorities:
- Value for money
- Social value
- SMEs
- Commercial and procurement delivery
- Skills and capability procurement
But in September that year – after a change of government in July – it was withdrawn, on the grounds of being insufficiently ambitious.
The new NPPS calls on contracting authorities to have regard to:
- Delivering value for money
- Driving economic growth
- Delivering economic and social value
- Building commercial capability to deliver value for money and stronger outcomes
By itself, this may not look like a huge change. But when combined with the changes in the new Social Value Model, the intention to promote Labour’s “Mission-driven” approach to government is clear.
The new Social Value Model replaces its predecessor’s five Themes with the five Missions that formed part of Labour’s 2024 election manifesto:
- Kickstart economic growth to secure the highest sustained growth in the G7 – with good jobs and productivity growth in every part of the country making everyone, not just a few, better off
- Make Britain a clean energy superpower to cut bills, create jobs and deliver security with cheaper, zero-carbon electricity by 2030, accelerating to net zero
- Take back our streets by halving serious violent crime and raising confidence in the police and criminal justice system to its highest levels
- Break down barriers to opportunity by reforming our childcare and education systems, to make sure there is no class ceiling on the ambitions of young people in Britain
- Build an NHS fit for the future that is there when people need it; with fewer lives lost to the biggest killers; in a fairer Britain, where everyone lives well for longer
The structure of the new Model is the same as the old one – comprised of:
- Policy Outcomes, Model Award Criteria (MACs) and sub criteria derived from each Mission or Theme
- Suggestions for suitable metrics
- Model questions for contracting authorities to use
While there is considerable overlap between the two Models, PPN02 does introduce some new elements and removes some outdated parts – notably the Covid-19 Recovery Theme.
You can see how the contents of the Models map onto one another here.
In terms of implementation, at the time of writing, we are in a transitional period:
- The Procurement Act 2023 took effect on February 24, 2025
- Procurement processes (including through frameworks) begun in advance of that date continue to use the PPN06/20 system
- From that date, contracting authorities can choose which system to use until September 30
- From October 1, the PPN02 Model supercedes the old version entirely
Meanwhile… CSRD and Double Materiality
Like the Procurement Act, the European Union’s Corporate Sustainability Reporting Directive (CSRD) is also making profound changes in a social value-adjacent space.
The Directive makes ESG reporting mandatory for in-scope companies and it adopts a principle of “double materiality”.
Previous reporting requirements (for example, under the earlier Non Financial Reporting Directive) only asked “single materiality” – that is, the financial implications.
“Double materiality” adds “impact materiality” to “financial materiality”. Impact materiality aims to encompass all impacts – on individuals, communities, and the environment.
Large companies that were previously covered by the NFRD are required to report in these terms in 2025, with more businesses being included in its scope in future years.
We’ve previously argued that social value provides a template for ESG practice to go from looking solely at preventing harm to promoting good outcomes.
Now, “double materiality” is making the need for a framework for measuring impacts outside the public procurement sphere urgent.
But that’s a big topic, which we’ll look at in detail in a future blog.
Alan Boyce
Senior Researcher More articles by Alan >
