The United Kingdom has issued a policy note that will require all UK contracting authorities to evaluate social value when awarding public contracts. This is a change from previous requirements that only asked contracting authorities to ‘consider’ social value and only for certain contracts.

Amidst a background of significant political and socio-economic tumult, this change goes into effect on the first of January 2021. Moving forward, contracting authorities will use the social value model to assess and score suppliers on the wider social, environmental or economic benefits they will create when delivering the contract.

While technical ability and value for money will still be a core aspect of bid evaluation, the social value score will be incorporated as an additional assessment criteria. This introduces the distinct possibility that the ability to deliver social value could become a determining factor in procurement in the near future.

In 2021, the social value model will assess bids based on criteria that include:

• 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, improving health and wellbeing and community integration.

Implications for Suppliers

The new approach will set evaluation criteria that all bidders will need to address no matter their size and type. Beyond providing social value, the government also hopes the policy will further level the playing field for the UK’s small businesses, start-ups, voluntary and community sector organisations, and social enterprises in bidding for government contracts.

“We want to see a greater variety of companies deliver government contracts, from every corner of our country - not just because that benefits local economies and communities but because it helps diversify our risk, create a more resilient supplier base and deliver some of our critical priorities,” says Cabinet Office Minister, Julia Lopez.

As a regular partner of the UK government, Palladium Managing Partner Sinéad Magill welcomes the new changes to the procurement process. “This aligns well with our Sustainable Business agenda and supports the drive across all of our projects to embed activities that generate social value alongside the project’s day to day delivery,” she says.

Magill suggests that suppliers hoping to meet these new standards will need to invest time going beyond boiler-plate corporate environmental and social policies to consider what additional social value can be delivered at a project level, and what is most relevant in the local context.

For suppliers new to building social value into their bids, Amelia Prestage, a leader on Palladium’s Project Management team, has some suggestions. “Beyond investing time in embedding social value activities in your organisation’s ways of working, I suggest two key actions to address this in each tender process,” she says.

“First, ensure the proposed social value activities have measurable outputs. This will help you in designing your interventions, and in tracking your impact. Second, spend time building an understanding of your specific client’s social value objectives and the local context. Without this key step, you run the risk of seeing this as a tick-box exercise and missing the chance to really make a difference.”

In a highly competitive landscape where market pressures can push suppliers towards increasingly lean and commercially competitive models, the inclusion of a mandatory social value component is a welcome change. This shift towards Social Value will ensure that all UK Government funded initiatives will have additional impact where they are needed most, supporting struggling communities, protecting the environment, and re-energising the economy.