Social Value in Public Contracts: A Guide for Small Firms
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
- The Public Services (Social Value) Act 2012 requires public bodies to consider social value when buying services above the procurement thresholds.
- Under PPN 002, central government buyers must give social value a minimum 10% weighting on above-threshold procurements under the Procurement Act 2023.
- Councils and other bodies set their own approach, and many use a measurement framework of their own.
- Commitments you make in a tender usually go into the contract, so only promise what you can deliver and report on.
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:
- it covers central government departments, executive agencies and non-departmental public bodies (other public bodies may choose to follow it);
- it must be applied to procurements starting on or after 1 October 2025;
- buyers must include "a minimum 10% weighting (or an equivalent measurement) of the total score, for social value";
- criteria must be relevant to the contract and proportionate, and buyers must avoid unnecessary burdens on small suppliers and voluntary organisations;
- it does not apply to below-threshold procurements;
- all social value commitments made in the procurement must be reflected in the contract.
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:
- a separate social value question with its own weighting, which varies from buyer to buyer;
- social value woven into quality questions;
- a measurement framework that puts a financial value on commitments, such as local spend or apprenticeship weeks.
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:
- Answer the buyer's chosen outcomes, not a generic list.
- Be specific: what, how many, when, where, and who is responsible.
- Make it proportionate to the size and length of the contract. Promising ten apprenticeships on a £40,000 contract is not credible.
- Show how you will measure and report, for example a quarterly line in your contract report.
- Give evidence of what you already do: current apprentices, local suppliers, a fleet change you have already made.
Common mistakes
- Copying the same social value text into every bid regardless of the buyer.
- Promising outcomes you do not control, such as a number of jobs for local people when you may not be recruiting.
- Forgetting that the commitments become contract terms you will be monitored on.
- Ignoring social value because it is "only 10%". On a close bid, those points decide the winner.
Next steps
- Read the social value section of the next tender you are considering before deciding to bid.
- Write down what you already do that counts: apprentices, local suppliers, fleet, community work. That becomes your evidence library.
- Browse open contracts for your trade, or get a free weekly shortlist matched to your firm: get free alerts.
For the wider rules, see the Procurement Act 2023 for small suppliers.
Sources
- GOV.UK: PPN 002, taking account of social value in the award of central government contracts (checked 19 October 2026)
- legislation.gov.uk: Public Services (Social Value) Act 2012 (checked 19 October 2026)