On 16 June, it was announced that Cabinet Office minister Pat McFadden 'has ordered the overhaul of public procurement rules to maximise the benefit to working people'. The Cabinet Office press release heralds a 'new simpler approach to social value' to be developed that can provide a simpler set of criteria for public bodies to use, with clearer rules on monitoring how suppliers are delivering on contract requirements, such as new jobs and training opportunities created.

The press release indicates that under changes proposed in a new Cabinet Office consultation, public bodies will have to give more weight to firms that can show they will boost British jobs and skills in their bids for contracts and that this would be a mandatory requirement in all major new contracts.  An example is given of assessing how a company could deliver a road building project.  It is stated that a public body would need to consider how the firm would offer benefits such as apprenticeships, T-level industry placements, opportunities for care leavers, or helping people get into work and stay in work in that area.

Given the paucity of information provided in the press release, it is not clear what the scope of such consultation will be nor what its likely impact will be on the Procurement Act 2023, the National Procurement Policy Statement and other social value policy tools that are already in place including in particular,  the recently revised Social Value Model that central government departments are required to adopt in their procurements. There are legal complexities to grapple with in the Procurement Act arising out of the UK’s obligations under the WTO’s Government Procurement Agreement and other free trade agreements which restrict the extent to which any local-preference policies can be adopted.

Addressing social value in procurement has been a thorny issue in recent years as vastly different approaches can be detected across the public sector.  A more consistent and simpler approach would be welcome but one which genuinely weaves the golden thread of social value throughout the entire procurement and contracting lifecycle in a targeted, contract-specific way and avoids treating social value as a separate, standalone requirement which in practice can result in requirements not directly related to the subject matter of the contract.  Social value should not just be a bucket list of “nice to haves” but should concern only matters that are relevant to what is proposed to be procured and be incorporated in a proportionate way. 

The Procurement Act already provides the tools for contracting authorities to do this through, for example, preliminary market engagement, obligations to have regard to the importance of maximising public benefit, removing SME barriers and having regard to the recently revised National Procurement Policy Statement.  The Act also provides ample scope for incorporating a wide range of award criteria in procurements providing they relate to the contract subject matter and are proportionate, having regard to the nature, complexity and cost of the contract.

Our team has significant expertise in advising contracting authorities on how to incorporate social value in procurement design in a meaningful way that aligns with the organisation’s policy imperatives and weaves the thread of social value through business cases, throughout the procurement process and into effective contract management, monitoring and enforcement.