What is social value and why does it matter?
The Social Value Act
The UK Social Value Act, formally known as the Public Services (Social Value) Act 2012, is a key piece of legislation that reshaped the way public sector organisations approach procurement and commissioning. It requires public authorities to consider not just the financial cost of a contract, but also the wider social, economic and environmental benefits it can deliver.
In practice, this means that when councils, government departments, or NHS bodies purchase goods and services, they are encouraged to look beyond price alone. They must evaluate how suppliers can contribute to creating stronger communities, supporting local economies, and protecting the environment. For example, a construction project may be assessed not only on quality and cost, but also on whether the contractor will create apprenticeships, reduce carbon emissions, or support local businesses in the supply chain.
The Act has placed “social value” at the heart of public procurement, giving organisations the opportunity to drive positive change while achieving better value for money. For suppliers, it has opened up new ways to demonstrate impact and stand out in competitive tendering
What are the benefits for businesses?
Social value provides a competitive edge to help you win tenders and recruit the best talent.
Public sector buyers now want more than competitive prices—they want suppliers who make a difference. Whether it’s creating local jobs, cutting carbon, or supporting communities, businesses that deliver real impact stand out and win contracts. It’s a chance to showcase values, strengthen reputation, and unlock new opportunities.
Winning tenders
Government guidance advises the minimum weighting that should be applied to social value is 10% of the bid score. A locally impactful social value plan could secure you a competitive advantage and help you win more contracts.
Recruiting talent
61% of young workers place as much importance on their employer’s values as they do on their pay packet*. A quality social value plan, which makes a real difference, will inspire employees and secure you the best talent.
*Cooperatives UK, 2025
How does it relate to ESG?
ESG and social value are closely linked but focus on different things. ESG (Environmental, Social, and Governance) is a broad framework used by businesses to measure sustainability and ethical performance. The business can decide what good ESG looks like for them.
Social value, on the other hand, is rooted in the Social Value Act, which specifically applies to public sector procurement. It focuses on the tangible social, economic, and environmental benefits organisations deliver through public sector contracts—such as job creation, community investment, and greener practices. Put simply, ESG guides corporate strategy, while social value shapes public procurement.
Which public bodies does it apply to?
The UK Social Value Act applies to a wide range of public bodies that commission or procure goods, works, or services. These include:
- Central government departments (e.g. Home Office, Department for Education, Department of Health and Social Care)
- Local authorities and councils across England
- The NHS and related health bodies (e.g. NHS trusts, integrated care boards)
- Housing associations when contracting with public funding
- Police and fire services
- Other public sector organisations that fall under public procurement regulations
In short, if an organisation is part of the public sector and awards contracts it must consider
How does it benefit the public sector?
The Social Value Act benefits the public sector by ensuring that every pound spent on goods, works, or services delivers more than just the core requirement.
It encourages commissioners to think about the wider social, economic, and environmental impact of their contracts, from creating local jobs and apprenticeships to reducing carbon emissions and supporting small businesses. This approach helps public bodies achieve better value for money while also driving positive change in communities.
By embedding social value into procurement, the public sector can strengthen local economies, promote sustainability, and improve wellbeing—maximising the impact of public spending.
How does it benefit communities?
The Social Value Act benefits communities by making sure public spending delivers real, lasting impact where people live and work.
When contracts are awarded, suppliers are encouraged to go beyond simply delivering a service—they are asked to create jobs, support local businesses, improve skills, and invest in the environment. A new housing development might also bring apprenticeships for local young people. A waste management contract could fund green spaces or reduce carbon emissions. Even routine services can support local suppliers and community groups.
By linking procurement to community outcomes, the Act ensures that investment stays local, strengthens social connections, and improves quality of life. Communities gain more resilient economies, healthier environments, and greater opportunities.
The Social Value Act helps turn public spending into community growth.