4 in 5 businesses not social value ready- and it could cost them public sector contracts
Social value is central to the way UK public sector contracts are awarded, yet just 1 in 5 of the 270+ businesses recently surveyed by Transformacy demonstrated a high degree of readiness to meet contracting authorities' latest requirements, leaving them ill-prepared to compete for and win public sector contracts requiring their services.
Social value in UK public sector procurement refers to the additional economic, social and environmental benefits that private sector organisations are increasingly required to address when tendering for and delivering public sector contracts. Its increasing prominence reflects the UK government's desire to maximise benefits to individuals and communities through its commercial activity, thus also reducing costs to the taxpayer elsewhere.
Changes to UK regulations mean that an explicit value is now placed on social value within the tender evaluation process and that value is growing.
"Since January 2021 the mandatory minimum weighting for social value within bid evaluation has been set at 10%. This level was intended to be heavy enough to act as a differentiating factor in bid evaluation, but in reality we are now seeing weightings as high as 30%," said Charlie Trietline from transformacy.
"What's more, the new Procurement Act 2023, which came into force in 2025, broadens the definition of value; shifting it away from awarding contracts based on the Most Economically Advantageous Tender to the Most Advantageous Tender instead. This change empowers authorities to take a broad view of value and base procurement decisions not just on cost, but on social value benefits such as local job creation and apprenticeships, sustainability and environmental impact, and supplier diversity and SME participation."
Transformacy's social value readiness survey assessed businesses' approach to social value across five critical areas: Leadership & Organisational Readiness; Policy, Strategy & Foundations; Bidding & Business Development Integration; Delivery & Operational Implementation; and Monitoring, Reporting & Continuous Improvement. Alignment was comparatively stronger in the first two areas, where high readiness was recorded by 18% of respondents in each. However, Delivery & Operational Implementation showed the sharpest gap, with just 6% of respondents in the high alignment category.
"This indicates that social value is escalating up the priority lists of business leaders and that initial steps are being taken to recognise it but that significant work remains before it is delivered in practice through contracts, operations and projects. Addressing this social value implementation gap is critical, as it gets to the heart of meeting the changes demanded by the Procurement Act 2023," said Charlie Trietline.
If your business needs help to close a social value gap, the Transformacy team is here to support you. Take our Social Value Readiness Assessment today, or visit our website to find out how our experienced team of sustainability consultants can help you enhance your public sector tender win rate.