Social Value: what it is and why it matters

If your business is involved in public procurement with central government, its agencies, the NHS or local authorities, getting on top of social value is crucial. So if it’s not a term you’re familiar with yet, it’s time to get acquainted! 

What is social value?

Social value refers to the positive social, economic and environmental benefits that organisations deliver through their activities and operations. These include:

• Indirect economic benefits: Money recirculating through local supply chains, workforce upskilling and job creation.
• Environmental benefits: Such as progress to net zero, restoration of natural environments and preservation of biodiversity.
• Wellbeing benefits: Measures which support the physical and mental health of workforces and communities
• Social benefits: Support for and involvement with community initiatives and groups, or provision of community amenities and spaces.

Social value isn’t just the latest business buzzword, because big changes are on the horizon.

With the upcoming Procurement Act 2023 set to transform the UK’s procurement systems in October 2024, social value and wellbeing in business practices will become mandatory law. From that point, all procurement officers will have to “explicitly evaluate”  social value, rather than just consider it. Contracts will no longer be awarded solely based on price or quality; the game-changer will be the social value a business brings.

This ground breaking legislation is set to shake up an outdated system, ensuring that every pound spent on public services delivers greater social value for money. 

This presents a golden opportunity for start-ups and SMEs to innovate, innovate, win more contracts and redefine the business landscape. Which brings us on to…

Why social value matters

In an increasingly connected world, businesses are part of a larger ecosystem of supply chains encompassing public bodies and large private organisations. Understanding and adapting to these new procurement laws is not optional, but essential. 

Social value, which includes positive social, economic and environmental impact beyond simple financial gains, is becoming the key differentiator in winning contracts.

What’s changing? 

The biggest change is in the decision-making criteria for awarding contracts. The new law shifts focus away from MEAT – “Most Economically Advantageous Tender”, to MAT – “Most Advantageous Tender”, where social value plays a crucial role. Price, size, history and personal relationships will no longer be the swing factors for winning contracts. Instead, social value is what will set businesses apart. 

Opportunities for SMEs

So here’s the exciting part: start-ups, scale-ups and SMEs stand to gain the most from these changes. Smaller, agile businesses that embrace social value and wellbeing can now compete on a level playing field with larger organisations. This presents a fantastic opportunity to innovate, deliver better outcomes and redefine the business landscape in their favour. 

The risk of inaction

Ignoring the changes to procurement law poses significant risks for businesses who bury their head in the sand. Businesses that fail to adapt may lose existing work and fall behind competitors who are social value ready. Central and local government now mandates procurement officials to explicitly evaluate social value and wellbeing in all contract bids, making it clear that this is a critical aspect of future success. This is never truer than in the recruitment space, but we are here to help. 

Helping agencies get social value ready

To support our recruitment agency partners in their social value journey, we have teamed up with SVRE who specialise in helping businesses get social value ready. Together, we can help recruiters prepare for this momentous change, with comprehensive guidance and resources, including a series of free webinars. Click here to register your interest and ensure you are on our social value email list.