Public Services (Social Value) Act 2012

The Public Services (Social Value) Act 2012 introduced a statutory duty requiring public authorities in England and Wales to think about social value at the point of commissioning and procuring services, rather than treating it as an afterthought. Although short in its text, the Act has had a significant and growing influence on how public contracts are evaluated, particularly in local government, health, and central government procurement.

What is the Public Services (Social Value) Act 2012?

The Act applies to service contracts and contracts for services combined with goods, where the procurement is subject to the Public Services Contracts Regulations. It requires contracting authorities to consider, before starting a procurement, whether the services to be procured could be delivered in a way that improves the economic, social, and environmental wellbeing of the relevant area. They must also consider whether it is proportionate to include this consideration in the procurement process itself.

The Act does not prescribe specific social value criteria or weightings. It gives buyers discretion to determine what social value looks like for each contract. In practice, this has led to social value being embedded as a scored award criterion in many public tenders, with buyers asking suppliers to describe employment and skills commitments, local supply chain spend, environmental commitments, or contributions to community wellbeing.

Central government went further in 2020 with Procurement Policy Note 06/20, which required all central government departments, executive agencies, and non-departmental public bodies to include social value as an explicit evaluation criterion worth a minimum of 10% of the total score in all major procurements above the relevant thresholds. This policy note made social value a material scoring element, not merely a consideration, for the largest government buyers.

The scope of the Act is limited to England and Wales, and to services rather than goods-only or works-only contracts. Scotland has its own community benefit requirements embedded in the Procurement Reform (Scotland) Act 2014, and Wales has expanded its approach through the Social Partnership and Public Procurement (Wales) Act 2023.

Why it matters for bidders

Social value has moved from a peripheral consideration to a mainstream evaluation criterion in UK public procurement. For many central government and NHS tenders, social value accounts for 10% or more of the total evaluation score. Suppliers who cannot articulate a credible, measurable social value offer risk losing contracts they might otherwise win on technical quality and price alone.

Effective social value responses are specific to the contract and locality. A generic commitment to "supporting local communities" scores poorly against a structured commitment with quantified targets, such as recruiting a defined number of apprentices from specific postcodes or achieving a percentage spend with local SME subcontractors. Suppliers should familiarise themselves with the Social Value Model issued by the Cabinet Office, which sets out the themes, outcomes, and metrics that central government buyers use to assess social value.

Example

A housing association in the East Midlands procures a repairs and maintenance service valued at 12 million GBP over five years. The evaluation uses a 60/20/20 split across quality, social value, and price. The social value criteria ask for commitments on local employment, apprenticeships, and environmental performance. A contractor who commits to recruiting 80% of new operatives from within a 15-mile radius and achieving zero-to-landfill waste disposal scores significantly higher on social value than one who offers only generic statements.

Frequently Asked Questions

Does the Social Value Act apply to goods and works contracts?

The Act as originally passed applies to service contracts and mixed contracts. It does not apply to contracts for goods only or works only. However, many contracting authorities voluntarily apply social value considerations to all contract types, and the Procurement Act 2023 broadens the scope further.

Is social value the same as corporate social responsibility?

They overlap but are not identical. Corporate social responsibility (CSR) is a company's broader voluntary commitment to ethical behaviour. Social value in procurement is the specific, measurable benefit delivered to a local area or community through the way a public contract is performed. Buyers want evidence of outcomes linked to the contract, not general CSR statements.

How is social value measured?

There is no single mandated measurement methodology, but the Cabinet Office Social Value Model provides a framework of themes (such as COVID-19 recovery, tackling economic inequality, fighting climate change, equal opportunity, and wellbeing) with associated metrics. Many buyers ask suppliers to submit a Social Value Plan with quantified commitments that can be monitored during contract performance.