In February, the new Procurement Act 2023 came into effect. Its purpose is to improve and streamline the way procurement in the public sector is conducted and has signalled a clear shift toward more transparent, inclusive and community-focused procurement practices.
Crucially, the Act places a great emphasis on social value, and that’s what we’re here to dive into today. The Act gives public sector buyers more flexibility to prioritise the social, economic and environmental impact of their contracts. For contractors, suppliers, and procurement teams alike, understanding what this means, and how to respond, will be essential in aligning the Governments national priorities and delivering meaningful impact in the years ahead.
To summarise the new Act and how it impacts Social Value specifically:
- Simplifies the bidding process
- Removes barriers for smaller businesses and voluntary, community and social enterprises (VCSEs)
- Ensures suppliers receive consistent feedback from public bodies on tenders
- The transition from MEAT
- Alignment in procurement decisions with long-term national priorities related to social value
MEAT vs MAT: A shift in procurement priorities
The Procurement Act 2023 brings about a significant shift in focus for public sector procurement.
Previously, under the Public Contracts Regulations 2015, public contracts were awarded to the ‘most economically advantageous tender’ (MEAT). The Procurement Act 2023 has updated this to ‘most advantageous tender’ (MAT).
This shift away from a cost-focused strategy allows social value to be a higher priority in the public procurement process. Under the MAT approach, authorities can now consider social value benefits such as local job creation and apprenticeships, supplier diversity, sustainability and environmental impact, and SME participation when awarding contracts. This opens the playing field and provides a wider range of bidders with a realistic chance of winning tenders.
For more information on MEAT VS MAT visit our blog, everything you need to know about the Procurement Act 2023
Understanding PPN 002 and PPN 003
PPN 002 and PPN 003 are Procurement Policy Notes (PPNs) that were published in the run-up to the implementation of the Procurement Act 2023. They update the Social Value Model (PPN 002) and the Social Value Act (PPN 003), to align with new terminology and required outcomes brought in by the Labour Government.
PPN 002
PPN 002 updates the Social Value Model by outlining how social value should be incorporated into public procurement, including delivering social and economic value. The updated Social Value Model supports five missions outlined by the government and the eight outcomes assigned to those missions:
Mission 1: Kick start economic growth
- Outcome 1: Fair work
- Outcome 2: Skills for growth
- Outcome 3: Resilient, innovative and flexible supply chain
Mission 2: Make Britain a clean energy superpower
- Outcome 4: Sustainable procurement practices
Mission 3: Take back our streets
- Outcome 5: Support the reduction in crime
Mission 4: Break down barriers to opportunity
- Outcome 6: Employment and training for those who face barriers to employment
- Outcome 7: Creating a pipeline of opportunities for the contract workforce, reducing barriers to entry for under-represented groups
Mission 5: Build an NHS fit for the future
- Outcome 8: Increasing productivity through physical and mental wellbeing – in the supply chain and communities in the relevant area
Mandatory application of the updated social value model
The updated Social Value Model becomes mandatory for in-scope organisations (all central government departments, executive agencies and non-departmental public bodies) from 1st October 2025. This follows a transition period from 24th February 2025.
Minimum 10% weighting for social value in evaluations
All in-scope organisations must apply a minimum 10% weighting to social value when evaluating tenders. The Social Value Model has a pre-determined set of goals and success criteria that suppliers can refer to when incorporating social value into their tenders to achieve the 10% weighting.
Alignment with the National Procurement Policy Statement (NPPS)
PPN 002 is aligned with the National Procurement Policy Statement which sets out the Procurement Act’s strategic priorities. The NPPS states that contracting authorities should give SMEs and VCSEs a fair chance when bidding for public contracts, creating high quality jobs and championing innovation. Contracting authorities are also required to deliver social and economic value that “supports the Government’s missions including by working in partnership across organisational boundaries where appropriate”.
PPN 003
PPN 003 provides updated guidance on embedding social value into public procurement in line with the Procurement Act 2023, reinforcing the importance of considering economic, social, and environmental factors from the earliest stages of the process. It applies to all central government departments, executive agencies, and non-departmental public bodies (in-scope organisations) for procurements commencing on or after 24 February 2025.
Unlike the previous regime, social value must now be considered at the strategic business case level, and organisations are encouraged to formally record and reference social value commitments in tender documents. There is also a renewed emphasis on early stakeholder engagement, including consultation with communities and potential service users.
Social Value Requirements
Organisations must consider how procurements can improve wellbeing in the relevant area, including:
- Economic Benefits: Supporting SMEs, apprenticeships, local job creation, and resilient supply chains.
- Social Improvements: Promoting workforce diversity, inclusion, mental and physical health.
- Environmental Impact: Encouraging carbon reduction, biodiversity, and sustainable practices.
Key Principles
- Proportionality – Social value requirements must be proportionate to the size and scope of the contract.
- Relevance – Social value should be directly related to the subject matter of the contract.
- Transparency – Objectives must be clearly stated in tender documents and measured in performance.
- Compliance – Alignment with the National Procurement Policy Statement (NPPS) and sector-specific frameworks is required.
Social Value Weighting
While not mandatory, a minimum 10% weighting for social value in contract evaluations is recommended—with the flexibility to go higher (up to 30%) depending on contract scope, sector, and strategic priorities. Social value must also be embedded in award criteria and performance measures.
Frameworks and Call-Offs
PPN 003 applies to both framework awards and call-offs. While the Social Value Act formally applies only to framework agreements, authorities are encouraged to embed social value requirements throughout the procurement life-cycle, including in call-off criteria.
This update ensures that social value isn’t just considered—but meaningfully integrated and measured—through every stage of public procurement, helping to maximise outcomes for communities, the environment, and the economy.
Best Practice for Implementation
To embed social value meaningfully and consistently, contracting authorities are encouraged to follow best practice guidance, including the Sourcing Playbook and the National Procurement Policy Statement (NPPS). These resources support early integration of social value into the procurement life-cycle—from strategic planning through to contract delivery. Authorities are also urged to consider innovative delivery models, such as co-commissioning services across multiple public bodies to maximise impact and efficiency, or breaking contracts into smaller lots to open up opportunities for SMEs and VCSEs. These practices not only improve access and competition, but also support a more inclusive and community-focused procurement process.
Delivering Social Value with Structure, Support, and Transparency
At Procure Partnerships Framework, we take a structured and hands-on approach to social value delivery. We work closely with clients to co-create tailored Social Value plans that reflect the unique needs of their organisation and local community. Through early consultation, we ensure priorities are clearly understood and translated into bespoke tender questions that lock in measurable outcomes from the start.
Once the project is underway, we ensure full transparency and accountability through Compliance Chain software. Every social value activity is logged, and supporting evidence is carefully verified to confirm delivery against bid-stage promises. This gives clients the confidence that commitments are being met, and outcomes are being properly tracked.
Throughout the entire project lifecycle, our clients benefit from tailored support via a dedicated Social Value team. Real-time updates through the Compliance Chain keep everyone aligned.
The average Social Value Add (SVA) of Procure Partnerships Framework projects has been calculated at 63%, which is 53%+ above the government’s 10% stipulation.
You can find out more at www.procurepartnerships.co.uk or by emailing our team of project delivery specialists at info@procurepartnerships.co.uk.
