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Social value in public procurement

The introduction of the Public Services (Social Value) Act 2012 marked a major evolution in public procurement, prompting purchasing organisations to begin reassessing their definition of value for money and adjusting their procurement strategies accordingly.

This has been a gradual process, with some buyers quick to embrace the change and others still catching up. Although the legislation came into effect in early 2013, it’s only relatively recently that social value has truly taken hold and become perhaps the leading topic of discussion and area of innovation in the public sector.

What constitutes ‘social value’?
There are a wide range of actions relating to a variety of societal, economic and environmental issues that come under the banner of social value. Among the most common is the requirement for contractors to provide support to local economies and tackle issues such as unemployment via the provision of apprenticeships, work experience, training opportunities and the promotion of local recruitment and SMEs.

Other prominent areas include support for third sector organisations through sponsorship and donations, a focus on ensuring robust ethical standards in supply chains, engaging with local communities through educational initiatives in partnership with schools and other public services, and participating in environmental conservation and sustainability projects.

What is the purpose of these requirements?
The legislation was introduced in part to address a perception that the primary stakeholders in public procurement – taxpayers – wanted to see more tangible benefits from public expenditure, as well as concerns that too many public contracts were being awarded to poorly performing contractors who had simply won a race to the bottom.

The challenge for public sector buyers
Now that social value is a major aspect of public procurement – sometimes accounting for up to 20% of award criteria – buyers face a multi-faceted set of challenges:
  • To identify their own specific socio-economic and environmental priorities;
  • to establish how to reflect these priorities in their procurements in the most impactful way;
  • to fairly and efficiently evaluate social value aspects of tender submissions from suppliers.
Want to know more?
For a detailed discussion of how to embed and evaluate social value in your procurement, access a free recording of our Social Value in Procurement webinar. The session provides:
  • A high level overview of the Public Services (Social Value) Act 2012.
  • An explanation of how it can be implemented in procurement documents.
  • Examples of social value questions in recent procurements.
  • Advice on how to evaluate responses objectively.

Access recording