The Procurement Act 2023 and social value: What authorities and suppliers need to know

July 29, 2025

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The Procurement Act 2023 significantly enhances the role of social value within public procurement, aiming to foster a more responsible and inclusive contracting environment

As of 24 February 2025, public procurement in England, Wales, and Northern Ireland is governed by the Procurement Act 2023. The Act significantly strengthens the role of social value in procurement across the entire contract lifecycle. In this breakdown, we explore what it means for authorities.

What is the Procurement Act 2023?

The tightly regulated processes of public procurement have often left teams feeling restricted, with limited ability to design contracts that deliver strategic outcomes, including social value. The Act introduces a simpler, more transparent system, with improved accessibility for SMEs and VCSEs.

Social value in the National Procurement Policy Statement (NPPS)

In February 2025, the government introduced a new National Procurement Policy Statement (NPPS), which authorities must legally ‘have regard to’ under Section 13 of the Act. It reinforces social value as a public procurement priority in several ways:

Mission-driven procurement

The NPPS aligns with the government’s ‘5 Missions’ and states that ‘contracting authorities should deliver social and economic value that supports the Government’s missions.’

A place-based approach

The NPPS stresses the importance of ‘taking into account priorities in local and regional economic growth plans.’ Authorities must therefore procure to support communities’ specific economic and social needs, rather than applying a one-size-fits-all approach.

Contract management and delivery

The NPPS emphasises social value not just in evaluation criteria, but also in terms of delivery. It states that authorities should:

Benchmark procurement capability, including skills and contract management capacity; and
Prioritise long-term value for money, including social value.

Authorities must ‘have regard to maximising public benefit’

While the Social Value Act 2012 only required authorities to ‘consider’ social value, Section 12 of the Act mandates contracting authorities to ‘have regard to the importance of maximising public benefit’ – a higher legal standard.

From MEAT to MAT

While public contracts were awarded to the ‘Most Economically Advantageous Tender’ (MEAT) under the Public Contracts Regulations 2015, Section 19 of the Act allows authorities to award contracts based on the ‘Most Advantageous Tender’ (MAT).

This empowers authorities to base procurement decisions on both social value benefits and cost.

Stepping up transparency and reporting

The Act strengthens accountability and transparency by requiring:

Authorities to set and publish at least three Key Performance Indicators (KPIs) for £5 million+ contracts;
Annual reviews assessing delivery against any social value KPIs used; and
Public reporting on supplier performance (including against any social value KPIs used).

Public debarment is a risk for suppliers that don’t deliver

A new public debarment list will exclude suppliers with a record of unethical behaviour or persistent non-delivery from securing government contracts.

SMEs & VCSEs: New opportunities

The Act seeks to make public contracts more accessible to small-medium enterprises (SMEs) and Voluntary, Community, and Social Enterprises (VCSEs) through:

A duty on contracting authorities to remove unnecessary obstacles that prevent smaller organisations from bidding;
Mandatory 30-day payment terms across public sector supply chains to improve cash flow for SMEs and VCSEs; and
New VCSE/SME spending targets for ‘in-scope’ organisations, with central government departments to:
- Set a three-year SME spend target (by April 2025)
- Set a two-year VCSE spend target (by April 2026)
- Report results annually

Read: PPN001 – Spend with VCSEs and SMEs

Social value requirements under the Procurement Act 2023

If you’re a contracting authority, the Act empowers you to ask for more from your suppliers and introduces new legal responsibilities to ensure delivery.

Here’s how you can maximise supply chain social value and align with government policy objectives.

Preliminary market engagement: Engage suppliers early

The Act provides suppliers with visibility of upcoming opportunities and enables authorities to shape tenders in collaboration with the market. Effective tools for preliminary market engagement include:

Meet the buyer events;
Request for Information (RFI) or Prior Information Notices (PINs);
Supplier questionnaires and surveys; and
Local Needs Analysis.

Authorities should clarify at tender stage the importance placed on social value through evaluation weightings.

Balance cost with long-term public benefit in evaluations

The shift to ‘MAT’ and the NPPS’s emphasis on ‘long-term’ value aligned with ‘local and regional growth plans’ provides a new opportunity to design and award contracts that tackle the specific needs of communities.

Set clear and enforceable social value targets

The Procurement Act 2023 introduces higher transparency and reporting standards for contract delivery, including social value. Authorities should:

Set and publish at least three KPIs in £5m+ contracts through a Contract Details Notice. It’s likely that many
(if not most) authorities will include a KPI to measure Social Value delivery;
Monitor supplier performance annually to assess (where a relevant KPI has been included) social value delivery;
Report on progress publicly; and
Enforce contractual obligations, using penalties, deductions, or termination for non-delivery of social value commitments.

Build capability to deliver social value

The NPPS makes clear that building capability is a key priority. So, if your organisation lacks the resources or know-how to unlock social value, consider:

Investing in staff social value training;
Developing processes to track and manage social value commitments; and
Collaborating with social value experts.

Don’t know where to start with measuring social value?

The Social Value TOM SystemTM is the most widely used standard for quantifying and reporting social value.

It takes the hard work out of creating trackable social value metrics in tenders, bids and contracts. Plus, all data publicly reported using the TOM System undergoes third-party validation.

While the government’s Social Value Model provides guidance to central government buyers on evaluating social value bids, it only applies to the tender stage, uses only qualitative criteria, and does not ‘measure’ social value or track delivery.

The TOM System and the model are fully aligned, and together, they provide a comprehensive view of social value impact.