This informal CPD article ‘Social Value and the Procurement Act 2023’, was provided by NHS London Procurement Partnership, one of four national NHS procurement hubs serving the health community in London and beyond.
Introduction
On 24 February 2025, the Procurement Act (which was enacted in 2023) came into force, updating how Contracting Authorities, including central and local government and the NHS, procure goods and services and manage contracts. Key updates to the Act include:
- an enhanced focus on value for money
- improved access for smaller suppliers
- better ethical and security safeguards for supply chains
- and enhanced transparency throughout the procurement lifecycle.
The Act replaces legacy EU procurement rules for the award of public contracts.
Aligned with the Act, there is a new National Procurement Policy Statement1, which outlines the Government priorities for public procurement. The priorities are: driving economic growth, delivering social and economic value and ensuring commercial capability and standards.
What is social value?
Organisations that purchase goods using public funds, such as the NHS, are required to demonstrate how they provide social value. For this reason, along with the legislative updates there is a new Social Value Model, outlining ways that suppliers to the public sector must ensure that they deliver additional benefit to society, the environment and the economy. Delivering social value also supports the aims of the United Nations’ 17 Sustainable Development Goals2.
When a supplier bids for work with a public sector organisation, at least 10% of the scoring criteria for the bid must be allocated to considering this additional benefit – their social value. Once a supplier has been awarded, rules within the new Procurement Act ensure they uphold their commitments, and their delivery is measured and monitored.
How is social value different to corporate social responsibility?
It should be noted that suppliers to the public sector must demonstrate ways they deliver social benefit in relation to the contract in question. This is separate to an organisation’s general corporate policies such as sustainability, addressing gender pay disparity and accessibility. For example, a supplier contracted to provide a hospital with scanning equipment could commit to hiring people to work on the contract who have been long-term unemployed, and to paying them at least the Living Wage. This would deliver social value, even if it is the organisation’s corporate policy to pay employees the Living Wage.
How is social value measured?
The commitments made by a supplier when they are bidding for a contract will have included metrics that can be used to evaluate performance over the life of the contract. Examples include:
- time or money spent supporting local community initiatives
- tonnes of waste diverted from incineration
- number of training opportunities provided on the contract
Delivering on commitments such as these provides benefit not just to the supplier and the public sector buyer, but to the wider community. Diverting waste from incineration, for example:
- reduces the waste management cost for the supplier
- improves the air and water quality for the local community, which in turn
- reduces public spend on health interventions for respiratory conditions
- and leads to improved productivity through reduced work absence and improved mental wellbeing.
In Summary
Social value is designed to be a golden thread that runs from a supplier, through their community, delivering benefit to individuals, organisations including their buyer, and society as a whole. The Procurement Act and the new Social Value Model mark a significant shift in public sector procurement with the power to achieve broad, far-reaching goals.
We hope this article was helpful. For more information from NHS London Procurement Partnership, please visit their CPD Member Directory page. Alternatively, you can go to the CPD Industry Hubs for more articles, courses and events relevant to your Continuing Professional Development requirements.
References
- https://www.gov.uk/government/publications/national-procurement-policy-statement
- https://sdgs.un.org/goals
