Government sets important new trend in social value

After a period during which things have been very quiet on the social value front, the government has recently (Sept 2020) issued new procurement guidelines which explicitly link social value in public procurement contracts to the Covid recovery effort.

At first glance this may seem a somewhat arcane point, but it is a potentially huge change in the social value world because it establishes a new mandatory model for social value, effectively replacing the previous legislation which merely required social value to be “considered” in public contracts in favour of a model requiring its “explicit evaluation”.

The relevant policy note is covered here in this government press statement and the policy note itself Action Note PPN 06/20.

PPN 06/20 says: “Social value should be explicitly evaluated in all central government procurement, where the requirements are related and proportionate to the subject-matter of the contract, rather than just ‘considered’ as currently required under the Public Services (Social Value) Act 2012.” This new model of social value, it says, “should be applied to all new procurements from 1 January 2021”.

“A minimum weighting of 10% of the total score for social value should be applied in the procurement,” the note says, “to ensure that it carries a heavy enough score to be a differentiating factor in bid evaluation; a higher weighting can be applied if justified.”

An Annex to PPN 06/20 sets out specified THEMES and OUTCOMES that should be used (although commercial teams can exercise discretion in deciding which are most appropriate) and these are in the screen-grabs below:

The guidance neatly sidesteps the thorny issue of how social value in bids should be “measured” by emphasising instead that “evaluation…should be qualitative so all potential suppliers, including SMEs, VCSEs and those new to government business can successfully bid by describing what they will deliver and how they will deliver it (i.e. it is the quality of what is being offered that will count in the evaluation, not the quantity)”.

Application of this model will be mandatory in central government.

Now, as far as I can see, this present guidance therefore applies to all Central Government Departments, their Executive Agencies and Non-Departmental Public Bodies — but not to local authorities. I’m no legal specialist so I thought I may be misunderstanding the PPN but at least one law firm has reviewed it and drawn the same conclusion. (If any of our solicitor colleagues know/think differently please comment or email.)

However, we have previously seen changes in the social value legislation retrospectively applied to local authorities and I suspect that that is what will happen here.

And frankly, if it doesn’t, then we should be lobbying wherever we can to ensure that this same level of consistency does apply to local authorities, because social value has been neglected of late and this new guidance offers a way of extracting the kind of social value that matters most as we and our public institutions set about the task of “building back better”. 

The relevant policy note is covered here in this government press statement and the policy note itself Action Note PPN 06/20.

Direct link to PPN 06/20.

UPDATE 16/12/20: PPN 06/20 has now been supplemented by new government guidance (initial aimed at central government departments) explaining how this “new Social Value Model” should be used. 

Birmingham UK. Freelance research, evaluation and policy consultant specialising in social enterprise and the third sector. I maintain the BSSEC blog and website

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