Last month, the government released its new National Procurement Policy Statement (NPPS) to support the new Procurement Act 2023, coming into effect on 24th February 2025. The statement outlines how the UK government plans to leverage its £350 billion annual buying power to benefit society. This builds on the Public Sector Policy Note (PPN 06/20) and strengthens efforts to achieve the goals of the Social Value Act 2012.
Public sector procurement might seem like a niche or boring topic, but it is one of the industries that most shape the well-being of the entire UK. And it has the potential to do much more. Since 2021, each public sector tender has a ’social value question’ that the bidding suppliers must answer. This question counts for a minimum of 10% of the evaluation score. Some local authorities require up to 30% social value scoring. The new Procurement Act moves the focus from the ‘most economical’ bid to the ‘most advantageous’, where contract-related social and environmental deliverables play a considerable role.
What does social value mean in this context?
The National Procurement Policy Statement lists key focus areas for public sector tendering:
- Kickstarting economic growth by creating opportunities for SMEs and SEs
- Making Britain a clean energy superpower through the use of green tech and protecting natural habitats and biodiversity
- Taking back our streets by reducing crime and providing support to organisations that strengthen community cohesion
- Breaking the barriers to give opportunities for under-represented groups in skills, training and work
- Building an NHS fit for the future by supporting good physical and mental health in the workforce.
To support the goals above, the Government has created a social value framework to guide suppliers to present a detailed, contract-specific social value plan for each tender that consists of activities that support employment and training, community cohesion and development, environmental impact and sustainability, health and wellbeing, crime prevention, and entrepreneurial activities. And these benefits are to be delivered within the industry and/or geographical area where the contract work takes place, making social value relevant to all parts of the country.
Voluntary, Community and Social Enterprise organisations (VCSEs) are integral partners for each one of these attainments
At the moment in the UK, only a handful of VCSEs (over 500,000 registered organisations) can operate as direct suppliers for the public sector. However, many of them can become ‘social value delivery partners’.
In this model, private sector companies bidding for government tenders will partner with VCSEs to form commercial, donation, and volunteering-based joint activities that can support the contract-related workforce and local communities.
This has created an enormous opportunity for the VCSE sector to access more donations ( money, products, services) and support from skilled and non-skilled volunteers. Additionally, VCSEs provide a vast range of education, employment, and environmental services that private sector companies can buy and utilise to reach their social value targets in procurement. Many of the targets required to meet the demands of the social value framework –hiring homeless, ex-offenders, and long-term unemployed, for example, as well as crime prevention and tackling domestic violence – require well-planned rehabilitation projects that only VCSEs can offer.
The third sector media and umbrella organisations that service the VCSE sector have slimmed down in the years post-Covid, due largely to the funding crisis. Because of this, VCSEs seem not to have enough information on this new procurement policy and the related opportunities it brings. They also lack the knowledge necessary to properly navigate and meet the social value criteria the private sector is bound to deliver. This could lead to VCSEs and the communities they serve missing out on tens or hundreds of millions worth of resources – an unbelievable waste.
With VCSEs undeniably vital in our societal well-being, now is the time to call action to improve cross-sector connectivity and interaction.
Tiia Sammallahti
Tiia Sammallahti is CEO of whatimpact, the National Social Value Marketplace. A serial entrepreneur, business author, charity founder, innovator and proven leader in tech-for-good, Tiia is passionate about transparency and innovation.
