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Social Value in Public Contracts: A Guide for Small Firms

Last reviewed 19 October 2026. General guidance, not legal advice.

Social value is the wider benefit a contract brings to the community: local jobs, training, smaller local suppliers, lower carbon and similar outcomes. Many public buyers now score it as part of the tender. For central government contracts above the thresholds it must carry at least 10% of the total score. Small firms can do well here, because local, practical commitments are often more believable than big promises.

Key points

Where the rules come from

The Public Services (Social Value) Act 2012 requires public bodies, before buying services above the procurement thresholds, to consider how the contract could improve the economic, social and environmental wellbeing of their area.

For central government, the detailed rules are in PPN 002, which applies to procurements under the Procurement Act 2023. According to the PPN:

Central government uses the Social Value Model, a menu of outcomes linked to the government's missions, from which buyers choose what matters for each contract.

How councils and other buyers approach it

Councils, housing associations, schools and NHS bodies are not bound by PPN 002, but most score social value anyway. Approaches vary:

Always read how this particular buyer will score it. The tender documents usually list the outcomes they care about, such as local employment, carbon reduction or support for young people.

What a small firm can credibly offer

You do not need a corporate social responsibility department. Good commitments are specific, relevant to the contract, measurable and within your control. Examples for trades and facilities firms:

Theme Example commitment How you would report it
Local jobs Recruit any new staff for this contract through the local Jobcentre and local job boards Number of local hires per year
Skills Offer one apprenticeship or two work experience placements a year Placements started and completed
Local supply chain Buy materials from local merchants where price and quality are equal Percentage of spend with local suppliers
Environment Use electric or hybrid vans for this contract, and reduce chemical use Miles driven, fuel or kWh used, products changed
Community Give a set number of volunteer days to a local project chosen with the buyer Days given, project outcomes
Fair work Pay at least the Real Living Wage on this contract Confirmation in contract reports

PPN 002 also says that where local jobs are created to deliver a central government contract, they must be advertised in local job centres through the government's Find a Job service.

Writing the social value answer

Treat it like any other quality answer:

  1. Answer the buyer's chosen outcomes, not a generic list.
  2. Be specific: what, how many, when, where, and who is responsible.
  3. Make it proportionate to the size and length of the contract. Promising ten apprenticeships on a £40,000 contract is not credible.
  4. Show how you will measure and report, for example a quarterly line in your contract report.
  5. Give evidence of what you already do: current apprentices, local suppliers, a fleet change you have already made.

Common mistakes

Next steps

For the wider rules, see the Procurement Act 2023 for small suppliers.

Sources

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