New year, new rules

From 1st January 2021, the government is introducing a new public procurement model that takes greater account of the additional social value created by contractors who are bidding for work.

Businesses that are seeking to procure government work must set out how they intend to deliver on the government’s social value priorities.

Currently, social value is only required to be ‘considered’ in central government procurement. However, with the new measures coming into place at the start of the new year, social value should now be ‘explicitly evaluated’ where the requirements are related and proportionate to the subject-matter of the contract. 

The social value model on which departments will assess contracts includes:

  • Supporting Covid-19 recovery, including helping local communities manage and recover from the impact of Covid
  • Tackling economic inequality, including creating new businesses, jobs and skills, as well as increasing supply chain resilience
  • Fighting climate change and reducing waste
  • Driving equal opportunity, including reducing the disability employment gap and tackling workforce inequality and promoting community integration.

Sarah Coughlan, Chief Operating Officer here at SPC says that this new policy is an ‘opportunity for local businesses and communities as well as governments to take seriously and do good in communities, especially locally.’ 

Social value is proving to be an ever-increasing part of corporate social responsibility within the procurement process. Eight years on, we see the evidence of the growing importance of social value, now accounting for around 20% of bid and tender evaluations. 

The new model states that 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’. All bidders will be tested, and bidders must demonstrate the full extent of the social value they will generate.

Whilst the new policy does not make it compulsory for local clients and businesses it does, however, emphasise the importance of social value-driven projects and calls for local clients to start getting serious about delivering real social value in partnership with communities to “build back better’. 

Sarah Coughlan believes this is a big move forward in embedding social value in procurement on central government contracts. She commented, ‘we await the detailed guidance, but look forward to seeing central government move towards standard award criteria, delivery objectives that describe ‘what good looks like’, and metrics for contract management and reporting. 

Renewed focus

This new government model inspires people to adopt a renewed focus on ‘what good looks like’ in the policy note. The new model has a focus on COVID-19 recovery improving work conditions and helping those unemployed due to the pandemic which in turn increases social value generated.

Social value is often met with the suspicion that the numbers aren’t completely reliable as it is oftentimes unclear how the figures are calculated. This new policy, however, signals a real opportunity to develop better-defined data, therefore creating a clearer understanding of the social value delivered and its statistics. There are now also more widely accepted benchmarks endorsed with historical data, forging an opportunity to build more trust among clients and contractors alike. Something we have seen repeatedly from our clients is a sincere desire to “positively disturb” the way that pounds-and-pence figures are applied to the social value of a project.

Construction Leadership Council’s Procuring for Value Toolkit provides helpful insight on how government, clients and the industry can maximise impact with a change in approach to procurement. Procuring for Value is a key theme of the sector deal and attempts to provide guidance, information and contact details as a support to suppliers when considering their ‘offer’ and delivery of social value. These are some helpful anchor points as the industry adapts and adopts new ways of working, which are all important steps towards improvement.

Enhancing community resilience

The policy note also stresses that clients will be free to target their social value requirements to the communities they reflect. In order to make the most of this, clients and constructors alike will need to renew their focus on engaging with local communities to deeply understand their real, rather than perceived needs, which will allow them to recover from COVID-19 together. 

Without this engagement, the risk is that social value is reduced to just a box-ticking exercise and not a factor that will actually help create a strong sense of social purpose with the potential to enhance community resilience. 

Targeted social value programmes should become the new industry standard in order to grow social value and truly make an impact to unite and level up the country while keeping local communities and businesses firmly at the heart of the recovery. Along these lines, social value will become a vital priority on the back of which we will hopefully see the creation of a whole new social contract.


Social value is proving to be an ever-increasing part of corporate social responsibility within the procurement process. 

The Public Service (Social Value) Act 2012, was introduced to transform how public money was spent, calling those who commission public services, such as public sector revenue contracts or capital projects, to consider how wider social, economic and environmental benefits could be secured.

The Act placed a legal requirement on commissioners to award public sector contracts based on cost, prior experience, and how they could deliver additional social value to the communities they serve.

8 years on, we see the evidence of the growing importance of social value, now accounting for around 20% of bid and tender evaluations.

Whilst the new policy does not make it compulsory for local clients and businesses it does, however, emphasise the importance of social value-driven projects and calls for local clients to start getting serious about delivering real social value in partnership with communities to “build back better’. 

Sarah Coughlan, Chief Operating Officer here at SPC says that this new policy is an ‘opportunity for local businesses and communities as well as governments to take seriously and do good in communities, especially locally.’ 

New measures as we enter the new year

From 1st January 2021, new rules will be put in place for procurement in relation to social value. A joint team from Cabinet Office and the Department for Digital, Culture, Media and Sport (DCMS), and Voluntary, Community and Social Enterprises (VCSEs) have designed a social value delivery model for central government buyers drawing on examples of best practice in local government. 

Currently, social value is only required to be ‘considered’ in central government procurement. However, with the new measures coming into force at the start of the new year, social value should now be ‘explicitly evaluated’ where the requirements are related and proportionate to the subject-matter of the contract. 

Sarah Coughlan believes this is a big move forward in embedding social value in procurement on central government contracts. She commented, ‘we await the detailed guidance, but look forward to seeing central government move towards standard award criteria, delivery objectives that describe ‘what good looks like’, and metrics for contract management and reporting. 

What good looks like

This new government model inspires people to adopt a renewed focus on ‘what good looks like’ in the policy note. The new model has a focus on COVID-19 recovery improving work conditions and helping those unemployed due to the pandemic which in turn increases social value generated.

Social value is often met with the suspicion that the numbers aren’t completely reliable as it is oftentimes unclear how the figures are calculated. This new policy, however, signals a real opportunity to develop better-defined data, therefore creating a clearer understanding of the social value delivered and its statistics. There are now also more widely accepted benchmarks endorsed with historical data, forging an opportunity to build more trust among clients and contractors alike. Something we have seen repeatedly from our clients is a sincere desire to “positively disturb” the way that pounds-and-pence figures are applied to the social value of a project.

As the policy note suggests “consistency means the process for defining social value will be standardised. It provides a clear, systematic way to evaluate these priority policies in the award of a contract.” This is vital for the whole industry. 

The new policy also fits in with the wider government agenda as Boris Johnson says he has a mission to unite and ‘level up’ the UK, improving the construction part of the agenda. This will also play a key part on the agenda since the big hit to the construction world due to COVID-19. 

Keeping social value local

The policy note also stresses that clients will be free to target their social value requirements to the communities they reflect. In order to make the most of this, clients and constructors alike will need to renew their focus on engaging with local communities to deeply understand their real, rather than perceived needs, which will allow them to recover from COVID-19 together. 

Without this engagement, the risk is that social value is reduced to just a box-ticking exercise and not a factor that will actually help create a strong sense of social purpose with the potential to enhance community resilience. 

Targeted social value programmes should become the new industry standard in order to grow social value and truly make an impact to unite and level up the country while keeping local communities and businesses firmly at the heart of the recovery. 


For more information on Social Profit Calculator click here

For more information on the Procurement Policy Note click here

Delivering social value is the cornerstone of what we do as we continue to support our clients to enhance their contribution to society. Through our approach and methodologies, we enable our clients to capture the societal and environmental impact of their activities and operations.

Prior to the pandemic, social value was becoming an increasing part of corporate social responsibility, economic and procurement narratives. The post-COVID era, however, paints a very different picture. For many businesses what’s left of 2020 will be a question of survival, and few will be in a position to deliver the aspirations that they might have had at the end of last year.

The UK economy has experienced a significant shock since the start of the COVID-19 pandemic, driving the UK into recession. GDP has fallen dramatically, -24.5% below the level of February 2020 in May this year. Production, services and construction still remain well below their February 2020 levels. As of August, approximately 9.6 million jobs were furloughed in the UK as part of the government’s job retention scheme and the number of people applying for universal credit has soared.

These current figures are only the tip of the iceberg, with the British Chamber of Commerce (July 2020) reporting that 29% of UK businesses plan to cut jobs in the next three months as the Coronavirus Job Retention Scheme is wound down. This would be the highest percentage of companies making redundancies since it began tracking employment intentions in 1989. The government’s OBR has forecast this could lead to at least 10% or as much as 20% of jobs furloughed on the scheme to be lost, with the unemployment rate reaching 12% before the end of the year. It is, therefore, not surprising that job insecurity is on the rise, with more workers saying it’s likely they’ll lose their job. Almost 6 in 10 say their financial security has become worse since the pandemic, with many furloughed workers having little indication of when they can return to work.

COVID-19 has exposed the weaknesses and inequalities in every society

Although we are seeing a gradual easing of lockdown, the virus has ruthlessly exposed gaps between the haves and the have-nots across the country and we are witnessing only the beginning of the economic and social implications. 

The people who have been worst affected by the virus are those who had worse health outcomes before the pandemic, including people working in lower-paid professions, those from ethnic minority backgrounds, and people living in poorer areas residing in overcrowded accommodation with limited access to personal outdoor space. Whilst it’s been known for years that these groups typically have worse health outcomes, shamefully, it has taken a global pandemic to draw attention to these deeply entrenched health inequalities, and it will continue to discriminate against the most vulnerable as the socio-economic effects will be with us for some time.

Time to get serious about social purpose

While the economic landscape is testing, we have witnessed the strength of collaborative action between business, the public sector and charities working together. It is crucial that we do not lose this venturing into “new normality”. 

The government has a number of key infrastructure and construction projects to come over the next ten years, with a total construction spend of £500 billion by 2030. Buildings have a direct impact on quality of life and long-term emission reduction goals. The construction sector is, therefore, at the core of a post-COVID recovery that can catalyse a transition to fairer more sustainable economies and must strive to make more sustainable local economies and healthier and more enjoyable places to live.

Fundamentally, buildings need to meet the needs of those who use them. Contractors bidding for work, or developers looking to become a development partner, will need to deliver more social outcomes. They will need to do more to capture and measure the social value of their initiatives to secure commercial success. This calls for the big corporations to be transparent when setting out their corporate purpose and to translate this into a strategy and real action.

A recent report from Social Enterprise UK summarising in-depth research across local government found 82% of councils believe spending public money focusing on social value, rather than cost alone generates higher levels of growth. So, it is now more important than ever to get serious about delivering real social value in partnership with communities, successfully incorporating local employment and ‘building back better’. 

Building back better means doing more than getting economies and livelihoods quickly back on their feet, but instead triggering investment and behavioural changes that will reduce the likelihood of future shocks and increase society’s resilience to them when they do occur. Doing this well requires a meaningful commitment to equality and inclusion, alignment with long-term emission goals, factoring in resilience to climate impacts, slowing biodiversity loss and increasing circularity of supply chains across the project lifetime from inception to long-term legacy impact. If adopted faithfully and based on local need rather than simply a checkbox exercise, this will create a very strong social purpose with the potential to enhance community resilience. Along these lines, social value will become a vital priority on the back of which we will hopefully see the creation of a whole new social contract.

We have an opportunity to evolve. As the need for social value-driven projects is made more and more apparent, it is time that we all, practitioners, contractors and clients, stop thinking of social value as simply something that must be demonstrated. In the past, social value has often been seen as a “tick box” exercise: you must create five new apprenticeships, for example, to win a project, regardless of the specific needs of the community. We can start to move away from this standardised approach to social value and think instead about delivering the social value that is right for each project, and each community in which the project sits. This is part of the Construction Leadership Council’s Procuring for Value Toolkit and promises to become an influential part of our industry in the coming months and years. This means that social value can meet the community’s real, as opposed to perceived, needs and ensure that the work that is being delivered offers real impact.