Why does it matter?
The Social Value Act fundamentally changed the basis on which public contracts are awarded. Before the Act, procurement decisions were overwhelmingly driven by price and technical quality. The Act introduced a legal obligation for public bodies to look beyond the immediate deliverables of a contract and consider the wider benefits it could generate for communities and society. For suppliers and contractors, this means that demonstrating how your work creates positive social, economic, and environmental outcomes is a factor in how contracts are evaluated and awarded.
Key details
What the Act requires
The Act places a duty on public authorities to "consider" how the services they commission could improve economic, social, and environmental wellbeing. Crucially, it is a duty to consider, not a duty to act. The Act does not mandate specific actions or weightings; it requires that social value is part of the thinking process during pre-procurement planning.
The Act originally applied only to services contracts covered by the Public Contracts Regulations 2015. In practice, however, many contracting authorities have extended the principle to goods and works contracts as well, and subsequent policy developments have significantly strengthened its application.
Limitations and subsequent strengthening
Critics of the Act have noted that the duty to "consider" social value was relatively weak and lacked teeth. There was no prescribed methodology, no minimum weighting, and no enforcement mechanism. This led to inconsistent adoption across the public sector.
The government addressed this through Procurement Policy Note 06/20 (PPN 06/20) in September 2020, which moved beyond the Act's "consider" obligation and mandated that social value be explicitly evaluated in all central government procurement with a minimum 10% weighting. This was further updated in February 2025 with PPN 002, aligning the social value evaluation model with the Procurement Act 2023.
Scope
The Act applies to public authorities in England and Wales. Scotland has its own procurement legislation (the Procurement Reform (Scotland) Act 2014), and Northern Ireland procurement is governed by separate regulations, although both jurisdictions have similar social value expectations.
UK & public sector context
The Social Value Act 2012 remains the foundational legislation for social value in UK public procurement, even though it has been significantly built upon by subsequent policy. It applies to all public authorities subject to EU-derived procurement rules (now replaced by the Procurement Act 2023), including central government, local authorities, NHS bodies, police, fire services, and housing associations.
For suppliers, understanding the Act matters because it establishes the legal basis for why you are asked about social value in virtually every public sector tender. Even where contracting authorities go well beyond the Act's minimum requirements (as many now do), it remains the starting point of the regulatory framework.