Social Value: Why it's no Longer Optional for Organisations 

Why Social Value Matters for Organisations 

1. It’s Now a Legal and Procurement Requirement 

In the UK, social value has a legal foundation in the Public Services (Social Value) Act 2012, which requires public bodies to consider the social, economic, and environmental benefits of their commissioning decisions. More recently, the Public Procurement Act 2023 has gone further, embedding social value more deeply into how government contracts are evaluated. 

For suppliers bidding for public contracts, social value is no longer a bonus point. Under the Cabinet Office’s Procurement Policy Note 002 (PPN 002), which has replaced PPN 06/20, central government bodies are required to apply a minimum 10% weighting of the total evaluation score to social value, a requirement that has been reinforced and extended by the Procurement Act 2023. In practice, many local authorities apply weightings significantly higher than this, with some reaching 30% or more. Failing to demonstrate credible, measurable social value commitments can mean losing contracts that would otherwise be competitive on price and quality. 

But legislation aside, the direction of travel is clear: commissioners, funders, and regulators increasingly expect organisations to demonstrate the value they create beyond the transactional. 

2. It Drives Competitive Advantage 

Organisations that take social value seriously gain a real commercial edge. In procurement, a well-evidenced social value strategy can be the difference between winning and losing a significant contract, whether that’s a construction firm demonstrating apprenticeships and local supply chain commitments, a healthcare provider showing how it is tackling health inequalities and supporting NHS Net Zero goals, or an SME evidencing community engagement and local hiring practices. In consumer markets, strong social value credentials support brand loyalty and reputation. With investors, they signal responsible governance and long-term thinking. 

This advantage is not just theoretical. Businesses with strong social value credentials tend to attract better talent, retain staff for longer, and build stronger relationships with their local communities, all of which feedback directly into business performance. 

3. Stakeholders Expect It 

Employees increasingly want to work for organisations whose values align with their own. Customers are making purchasing decisions based on ethical considerations. Investors are applying Environmental, Social, and Governance (ESG) criteria with growing rigour. Communities are demanding a voice in how businesses that affect them operate. 

Organisations that ignore these expectations do so at their risk. Reputational damage, staff turnover, and stakeholder disengagement are real business risks. Social value, when embedded authentically, provides a powerful response to all of them. 

4. It Helps Tackle Systemic Challenges 

The scale of the challenges facing society, climate change, inequality, poor mental health, and skills shortages can’t be addressed by the government alone. Businesses have a critical role to play in driving meaningful change. Every hiring decision, procurement choice, and community investment is an opportunity to create a positive impact. 

For organisations that genuinely want to contribute, social value provides a framework for doing so in a structured, measurable, and accountable way. 

The Difference Between Doing Good and Demonstrating Value 

Many organisations already do things that generate social value; they just haven’t connected, measured, or communicated them effectively. This gap between activity and impact evidence is one of the most common challenges we encounter in practice. 

There is an important distinction between: 

• Activities – what you do (e.g., running a volunteering programme, offering apprenticeships) 

• Outputs – what you produce (e.g., 20 volunteer days completed, 5 apprentices enrolled) 

• Outcomes – what actually changes as a result (e.g., improved community wellbeing, individuals gaining employment) 

Commissioners, funders, and stakeholders are increasingly interested in outcomes, not just activities. Reporting on what you did matters far less than demonstrating the difference it made. This requires organisations to invest in measuring impact, gathering evidence, and reporting transparently – including on what has not gone to plan. 

Balanced, honest reporting builds far more trust than polished claims that can’t withstand scrutiny. ‘Value washing’, making exaggerated or unsupported social value claims, is not only unhelpful but increasingly risky, particularly in procurement, where unsupported statements can result in non-compliance or exclusion. 

What Does a Credible Social Value Approach Look Like? 

Organisations that do social value well tend to share a number of characteristics. Their approach is embedded rather than bolted on; social value is part of how the business operates, not a separate initiative tacked onto the side. Here is what that looks like in practice: 

• Alignment with Organisational Purpose – The most credible social value strategies connect directly to what an organisation does. A construction company creating local employment opportunities, a healthcare provider investing in staff mental health, a professional services firm supporting social enterprises in its supply chain, these are all examples of social value that flows naturally from core operations. 

• Community Engagement – Genuine social value is co-created with communities, not imposed upon them. This means consulting stakeholders, listening to local needs, and designing approaches that address what is wanted and needed. Organisations that engage proactively with voluntary and community sector organisations, charities, and social enterprises tend to deliver more meaningful outcomes and score more highly in procurement evaluations. 

• Measurement and Reporting – What gets measured gets managed. Organisations need robust systems for tracking social value outcomes, quantitative data where possible, and qualitative evidence where not. Reporting should be regular, transparent, and independently verified where credibility is important, such as in public procurement contexts. 

• Governance and Accountability – Social value commitments need to be embedded in governance structures, not left to individual champions. This means clear policies, senior leadership accountability, integration into procurement and supply chain decisions, and ongoing monitoring and improvement. Under the Public Procurement Act 2023, buyers have greater powers to monitor social value delivery throughout a contract, not just at the point of award.