Social value in procurement is an essential consideration for organisations, particularly in the public sector. With procurement accounting for a significant portion of government spending, ensuring that contracts deliver social, economic, and environmental benefits is a priority.
But what exactly does social value in procurement mean, and how can organisations maximise its impact?
In this blog, we will be diving into what social value is, provide key examples of how it works across different public projects, and some top practical tips for embedding it into your future procurement processes.
Jump to:
● What is social value in procurement?
● Why is social value important for organisations?
● How does social value benefit procurement?
● Social value examples in public projects
● Six tips to maximise social value in procurement
● How does Procurement Hub maximise social value?
What is social value in procurement?
Social value in procurement is all about making a positive difference through the way organisations buy goods and services. It’s not just about getting the best deal, it’s about making sure that every contract helps support jobs, protect the environment, and gives back to the community.
By considering social value, organisations can make sure their spending to deliver important projects creates lasting benefits, whether that’s by supporting local businesses, cutting carbon emissions, or offering opportunities to people who need them most.
The Procurement Act 2023 sets out that contracting authorities must have regard to the National Procurement Policy Statement (NPPS) when procuring public contracts, unless they are exempted. The NPPS sets the Government’s strategic priorities for public procurement in support of the Government’s missions.
Why is social value important for organisations?
Achieving value for money is always the overarching priority in public procurement. This must include consideration of outcomes and quality to avoid waste from low value, poor quality bids. This means optimising the use of public funds by balancing effectiveness, efficiency and economy over the life-cycle of a product, service or works to achieve the intended outcomes of the procurement. This includes wider socio-economic and environmental benefits and impacts.
When embedded correctly, social value in procurement can massively help organisations drive positive change, enhance reputation, and create meaningful impact.
By prioritising social value, businesses and public sector bodies can:
● Support local communities and boost economic resilience
● Drive sustainability and reduce environmental impact
● Promote fair employment and ethical practices
● Strengthen relationships with stakeholders and the public
Focusing on social value isn’t just a regulatory requirement, it’s a way to future-proof procurement strategies and deliver lasting benefits.
How does social value benefit procurement?
Procurement plays a crucial role in shaping the way organisations interact with society, making it a powerful tool for delivering positive change. When social value is integrated into procurement decisions, it extends the benefits of each contract beyond financial savings, creating lasting impacts on communities, businesses, and the environment.
By embedding social value principles, procurement can become a force for good, ensuring that public and private sector spending contributes to meaningful, long-term improvements.
Some of the key benefits include:
● Encouraging suppliers to offer innovative, community-focused solutions
● Driving greater competition and engagement from SMEs and social enterprises
● Ensuring long-term, sustainable outcomes rather than short-term cost savings
● Improving supplier relationships through shared ethical and social goals
Social value examples in public projects
Across different industries, organisations are using social value to make a positive impact, whether that’s through sustainability efforts, boosting local economies, or enhancing community well-being.
Here are some examples, businesses can find practical ways to embed these principles into their own strategies:
● Social value in construction: Large-scale construction projects can open doors for local employment and apprenticeships. A public housing development, for instance, may require contractors to hire a percentage of their workforce locally or offer training programs for young people.
● Environmental sustainability: Infrastructure projects can integrate sustainability measures, such as using recycled materials, reducing carbon footprints, or investing in green spaces to benefit local communities.
● Supporting local businesses: Procurement projects that prioritise SMEs and social enterprises help keep investment within local economies, fostering long-term growth.
● Community engagement: Major projects, like new transport infrastructure, can involve local consultation to ensure they meet the needs and concerns of those they affect.
● Ethical supply chains: Making responsible choices around fair wages, ethical sourcing, and labour practices ensures that procurement delivers positive social impact at every stage.
At Procurement Hub, we ensure that our suppliers work to deliver social value through our procurement solutions. For example, Major Projects partner Willmott Dixon Interiors delivered an award-winning social value project for transforming the Soho Theatre Walthamstow and generating over £6.5 million in social return on investment through local collaborations.
At its core, procurement isn’t just a process to deliver projects, it’s also a tool for change. By embedding social value into procurement decisions, organisations can contribute to stronger communities, a healthier environment, and more resilient local and national economies.
Six tips to maximise social value procurement
By following best practices and ensuring accountability, organisations can turn procurement into a powerful tool for social good.
Here are our six essential tips to help procurement teams prioritise social value effectively:
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Embed social value in the procurement strategy: To maximise social value, it’s essential to build it into the procurement process from the outset. This means setting clear objectives that align with community needs, national policies, and the broader sustainability agenda.
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Define measurable outcomes: One of the biggest challenges in social value implementation is measuring impact. Establishing clear, quantifiable goals, such as the number of jobs created, CO2 reductions, or hours of community volunteering can help ensure that commitments translate into tangible benefits.
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Engage with suppliers early: Engaging with potential suppliers before tendering allows organisations to communicate their social value expectations clearly. Market engagement sessions can encourage suppliers to think creatively about how they can deliver social value within their contracts.
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Use weighted evaluation criteria: A practical way to ensure that social value is prioritised in procurement decisions is by incorporating it into evaluation criteria. Allocating a percentage of scoring to social value commitments ensures that it carries weight alongside cost and quality considerations.
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Monitor and report on social value delivery: Maximising social value doesn’t end when a contract is awarded. Ongoing monitoring and reporting ensure that suppliers fulfil their commitments. Regular assessments, KPIs, and progress reports help track the impact and make adjustments where necessary.
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Encourage collaboration and best practice sharing: Procurement teams can maximise social value by fostering collaboration among suppliers, public sector bodies, and industry leaders. Sharing best practices and successful case studies can inspire innovative approaches and improve overall impact.
How does Procurement Hub maximise social value?
At Procurement Hub, we embed social value into every part of the business, from our Giving Back initiative to the procurement strategies we help to develop and deliver. Our procurement solutions and services prioritise community impact, sustainability, and ethical sourcing, ensuring that procurement decisions create lasting benefits. We work closely with suppliers to drive innovation, monitor social value delivery, and support the wider public sector in meeting their social value commitments.
Our team of specialists are on hand to help create bespoke solutions that are as simple and effective as possible. Get in touch with our team to help find a procurement solution that meets your needs today.