Public sector procurement spending in the UK reached approximately £461 billion in the 2025 to 2026 financial year, according to the House of Commons Library. This vast purchasing power serves as a primary mechanism for driving positive community change. Central to this objective is the social value model, which requires public bodies to secure wider benefits for society when purchasing goods and services.
The guidance explains that contracting authorities must consider value for money and the importance of maximising public benefit when carrying out covered procurements. It is vital to understand how these rules work together as it aids buyers in designing fair tenders and helps suppliers make realistic commitments.
What is a social value model and how is it used in business?
The Social Value Model is a Cabinet Office procurement tool used by in-scope central government organisations to select and evaluate social value outcomes that are relevant to a contract. Rather than considering price alone, a contracting authority may assess price, quality and relevant social or environmental factors when identifying the most advantageous tender. Wider public sector organisations may also choose to adopt elements of the model, but PPN 002 does not automatically apply to every UK public body.
Under PPN 002, central government departments, executive agencies and non-departmental public bodies must allocate a minimum of 10% of the total available score to social value in relevant and proportionate procurements within the policy’s scope. This 10% requirement comes from PPN 002 rather than directly from the Procurement Act 2023. Local authorities and other public bodies may apply their own social value policies and weightings, so suppliers should always check the specific tender documents.
Depending on the contract and the published award criteria, a supplier’s proposal might include apprenticeships, employment opportunities for people facing barriers to work, skills development or measures that reduce the environmental impact of delivery. Any proposed outcome must be relevant to the contract, proportionate and supported by a credible delivery plan. These requirements help buyers consider wider public benefits while continuing to assess value for money.
How do social value models impact procurement decisions in the UK?
The social value model affects procurement decisions by allowing buyers to assess relevant social, economic and environmental benefits alongside price and quality. This means the cheapest bid does not automatically have to win.
Under the procurement act 2023, the legal standard shifted from the "Most Economically Advantageous Tender" to the "Most Advantageous Tender" (MAT). This gives buyers explicit legal backing to evaluate social benefits alongside price. The winning bid must achieve the strongest overall result against the award criteria.
A more expensive bid could therefore win if it provides better overall value. However, social value does not automatically override price. The buyer must follow its published evaluation method and continue to consider value for money.
Note that while this framework governs much of the UK, public procurement is heavily devolved; Scotland, Wales, and Northern Ireland each have distinct regional social value legislation.
The decision-making process typically follows these sequential steps:
- Define the objectives: The public body identifies key local priorities before publishing the tender.
- Publish the requirements: The tender documents clearly state which specific community benefits are required from the prospective suppliers.
- Evaluate the bids: Evaluators rigorously score the supplier's commitments against the agreed criteria.
- Monitor the contract: The winning supplier must regularly report on their progress using verifiable data throughout the life of the contract.
The social value model focuses on the quality of the supplier’s proposal, not simply the number of activities promised. A supplier should explain what it will deliver, how it will deliver it, who will be responsible and how progress will be measured. Furthermore, this approach gives SMEs and social enterprises an opportunity to demonstrate their local knowledge, specialist experience and community impact.
What are the primary missions of the central government framework?
The PPN 002 social value model is organised around five government missions. However, buyers do not need to use all five missions in every procurement. They should select the outcome that is most relevant to the contract and proportionate to its value and scope.
The five missions are:
- Kick-start economic growth
- Make Britain a clean energy superpower
- Take back our streets
- Break down barriers to opportunity
- Build an NHS fit for the future
Each mission is supported by outcomes, award criteria and reporting measures. For example, a digital services contract might focus on skills, apprenticeships or opportunities for people who are underrepresented in the technology sector.
To better understand how the criteria have developed recently, the comparison table below illustrates the direct transition from the previous PPN 06/20 themes to the new PPN 002 missions.
A further update is due to take effect in 2027. The government published PPN 026: The Social Value Model in August 2026. It will apply to covered procurements started by in-scope central government organisations on or after 1 January 2027, where the total contract value is at least £1 million including VAT.
Under PPN 026, contracts worth at least £1 million but less than £5 million will have a minimum social value weighting of 10%. Whereas, contracts worth £5 million or more will have a minimum weighting of 20%. The revised social value model will focus more closely on good jobs, skills and opportunities for people who face barriers to employment.
Other UK public sector organisations may choose to follow the revised model, but PPN 026 will not automatically apply to every public sector buyer.
How can organisations effectively measure their social impact?
Organisations can measure social impact by setting clear commitments and deciding what evidence will be collected during the contract. Under the PPN 002 social value model, evaluators assess the quality of the supplier’s method statement and implementation plan. Suppliers may be asked to state how much they will deliver, but the highest number does not automatically receive the highest score.
The proposal must be realistic, relevant and supported by a credible plan. Some organisations also use the Social Value TOM System, previously known as the National TOMs. TOM stands for Themes, Outcomes and Measures.
The system works across three levels:
- Themes: The broad areas in which the organisation wants to create positive change, such as employment, communities, skills or the environment.
- Outcomes: The changes the organisation wants to support, such as helping people into work or reducing a local skills shortage.
- Measures: The activities and results recorded against each outcome, such as apprenticeships created, training completed, volunteering hours delivered or emissions reduced.
The TOM System can help organisations plan and report their social value. However, it is not the mandatory scoring method used by the central government social value model. Buyers must use the evaluation method set out in their tender documents.
How does the new legislation affect existing framework agreements?
When buying through an existing framework agreement, public sector buyers must follow the social value process set out in that framework.
If the social value model is to be evaluated when a contract is called off from the framework, the framework documents must allow for it. The buyer cannot introduce new social value award criteria at the call-off stage if the framework did not include them.
Where the framework allows it, the buyer may be able to adjust the requirements to suit the contract. This could include the delivery location, timetable, contract value or the people who are expected to benefit. Buyers must also use the version of the social value model built into the framework. For example, a framework using the earlier PPN 06/20 model may continue to use that model for its call-off contracts. Additionally, a framework designed around PPN 002 should use the PPN 002 approach.
For frameworks established from 1 January 2027, PPN 026 states that social value should be assessed at both framework and call-off level where the policy applies. Buyers and suppliers should check the framework documents and the latest Procurement Act guidance before beginning a call-off.
How can the public sector deliver positive change through digital squads?
Public sector procurement is ultimately about improving society. When delivering complex technology projects, the focus must remain firmly on both strict governance and tangible community benefits. Satigo operates exactly in this space, acting as a specialist digital capability partner for regulated organisations.
Meeting these requirements does not mean compromising on technical delivery. When using digital squads, public bodies can plug fully governed, multi-disciplinary teams directly into their existing programmes. This approach ensures that essential project momentum is maintained, while naturally supporting established community initiatives such as digital literacy for older adults and skills workshops for underrepresented groups.
Ultimately, integrating technical expertise with a clear social mission helps build a much fairer, more inclusive society. If your organisation needs to align its upcoming technology programmes with these broader community goals, explore Satigo’s website today to see how a structured squad fits into your overall delivery plan.
