Social Value Explained: An Overview for Suppliers

Social Value is one of the most important considerations in public sector procurement.

Buyers are no longer looking solely at price and technical capability. They also want to understand the wider benefits a supplier will deliver to people, communities, the economy and the environment.

Whether you’re new to tendering or looking to improve your win rate, understanding Social Value is not something your business can afford to overlook.

What is Social Value?

Social Value refers to the wider positive impact a supplier creates through the delivery of a contract. This could include creating local jobs, reducing environmental impact, supporting community initiatives, or improving skills.

When evaluating Social Value, contracting authorities will often align their priorities with national and local objectives. These may include the National Procurement Policy Statement (NPPS), local authority priorities and wider community outcomes. Demonstrating how your proposal supports these objectives will strengthen your bid.

What does Social Value include?

The term Social Value can cover a wide range of initiatives and outcomes. The concept is often discussed under the banner of Community Wealth Building. While the terminology differs, the principle is similar – creating long-term economic, environmental and social benefits that leave a lasting positive impact on local communities.

One of the easiest ways to understand Social Value is to break it down into four key areas. Reviewing your business against each of these themes can help you identify strengths and opportunities for improvement.

• Individuals: Fair pay, skills development, health and wellbeing, social equity, access to employment, career progression, apprenticeships, financial well-being initiatives, flexible working/work-life balance.
• Communities: Community engagement, local economic development, cultural preservation, safety and security, environmental quality, education programs, support for charities.
• Environment: Environmental sustainability, carbon reduction, resource efficiency, biodiversity conservation, whole-life impact, decommissioning practices.
• Economy: Innovation, ethical supply chains, support for VCSEs, working with local businesses, creating local employment opportunities.

Why Social Value matters

Social Value criteria are a key part of the tender evaluation process, and a greater focus has been put on them with the introduction of MAT (Most Advantageous Tender) as the overarching approach for awarding contracts.

Bidders are assessed not only on price and quality but also on the additional value they bring to society, communities, and the environment.

1. Enhanced Scoring: Bids are often evaluated on a range of factors, with social value initiatives contributing significant additional points. A robust social value proposition can elevate your overall bid score, especially when price and technical capabilities of competing suppliers are closely matched.
2. Weighted Evaluation: Many public sector procurements allocate up to 20% of the overall evaluation score to Social Value, although this varies depending on the contract and contracting authority. Even where the weighting is lower, a strong Social Value response can make the difference between two closely matched bids.
3. Differentiation Factor: In a competitive market, suppliers with a clear and documented commitment to social and environmental benefits can distinguish themselves from those purely focused on cost or quality. This differentiation builds trust with contracting authorities, who are increasingly prioritising sustainable and ethical partnerships.
4. Priority Alignment: Contracting authorities have both local and national objectives to achieve, many of which focus on Social Value. By aligning your bids with the priorities identified in the Procurement Act and NPPS, you can make your bids more appealing to buyers. Many public organisations have their own priorities, which you may be able to find on their website or by contacting them directly.
5. Evidence Required: It would be easy to list a range of Social Value initiatives to make your business more appealing, however you have to offer more than hollow ideas. Suppliers have to provide measurable actions, targets, and evidence to demonstrate their impact and add real value to their bids.
6. Contractual Obligations: Commitments made in your bids will become a contractual obligation. This means whatever deliverables you list in your bids, even if they do not fulfil a stated requirement or are intangible, you must follow through with them or you will be in breach of contract.