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HCR Law Events

12 April 2021

Social value: a turning point for public procurement?

Bids submitted for central government contracts must be evaluated not simply on the best value for money but also on the additional social benefits they offer.

This follows a new Public Policy Note (PPN), effective from January this year, which adds far more focus  on social value as an element of the traditional ‘most economically advantageous tender’ (MEAT) approach.

What is the social value model?

Previously, the identification and adoption of criteria related to social value was discretionary across the board. While there is not yet a definition of ‘social value’, the PPN does instead identify a number of themes which should be incorporated into bid criteria and evaluation exercises. Those are:

  • Covid-19 recovery
  • Tackling economic inequality
  • Fighting climate change
  • Equal opportunity
  • Wellbeing

The PPN is not prescriptive as to how social value should be achieved (which would be too cumbersome), but instead identifies the outcomes which should be pursued. For example, “Tackling economic inequality” might be achieved by increasing supply chain resilience and capacity or creating new businesses/jobs/skills. The latter might include, for example, an assessment of the availability of apprenticeships or training opportunities offered by a bidder.

What does this mean for you?

If you are offering, or bidding for, a central government contract, you will need to embrace this shift in ethos. With social value accounting for not less than 10% of any marking scheme, it’s a vital component of any bid submission and demands more than lip service. Full account will need to be taken of up to date government guidance as to how social value will be identified and assessed (e.g. The Social Value Model guidance note, Edition 1.1 – 3 Dec 20)

For contract opportunities offered by other contracting authorities, the position is still that the inclusion of social value criteria is discretionary (and subject, as always, to it being relevant to the subject-matter of the contract and proportionate) and that a contracting authority has considerable flexibility as to how it looks to achieve any social value outcomes it identifies.  The relevance of, and importance attributed to, social value will therefore be determined in the course of each procurement exercise.

What lies ahead?

The months ahead will show how the PPN and associated government guidance notes are going to impact on the prominence of social value in the provision of goods and services to central government bodies.

Early indications are, however, that it is a concept which both contracting authorities and bidders are embracing (and indeed have been moving towards for some time). In our experience, other contracting authorities are also placing increasing importance on social value where they can and are likely to continue to do so. Given the review of the public procurement regime currently being undertaken by the Cabinet Office, we can perhaps expect to see this position formalised in the medium/long term.

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About the Author
Clare Murphy, Partner

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