A professional’s guide to the Procurement Act 2023. We explore the new legislation and offer a FREE COPY of our 50-page Procurement Act Handbook (published 2025). Expert guidance and checklists!

In this extract of the ESG Pro Procurement Act Handbook, we consider the key changes to the Procurement Act 2023 and especially the absolute focus upon Social Value in Public Procurement, indisputably the most complex change.

Social Value and Procurement

Introduction to Social Value in Public Procurement

Social Value has become an increasingly important component of public procurement, moving beyond traditional considerations of cost and efficiency to encompass the broader impact of government spending on society. The Procurement Act (2023) cements Social Value as a key requirement in public tenders, ensuring that suppliers demonstrate how their operations contribute positively to communities, the environment, and the economy.

Under previous procurement regulations, Social Value was often seen as a secondary or optional consideration. However, with the Social Value Model (PPN 06/20) now embedded in law, procurement decisions must actively account for the economic, social, and environmental benefits suppliers provide. This represents a major shift in public contracting, making Social Value not just a compliance requirement but a competitive advantage.

The Role of Social Value in the Procurement Act (2023)

The new legislation requires contracting authorities to evaluate tenders based on clear Social Value metrics. This means that procurement decisions will no longer focus solely on price but will instead incorporate:

• Job Creation and Local Employment – How contracts support employment and skill development, particularly within underrepresented communities.
• Carbon Reductionand Sustainability – Whether suppliers have clear commitments to net-zero goals and sustainable practices.
• Supply Chain Resilienceand Ethical Sourcing – Ensuring that procurement decisions promote fair trade, ethical labour practices, and social enterprise engagement.
• Innovationand Community Impact – Encouraging suppliers to offer innovative solutions that contribute to long-term societal benefits.

Measuring and Evidencing Social Value

One of the key challenges businesses face under the Procurement Act (2023) is effectively measuring and evidencing their Social Value contributions. The government has developed several frameworks to assist suppliers in quantifying their impact, including:

1. The National TOMs Framework– A set of Themes, Outcomes, and Measures designed to provide a structured approach to Social Value reporting.
2. The NHSEvergreen Supplier Assessment – A dedicated sustainability and ethics standard for suppliers working with the National Health Service.
3. Carbon ReductionPlans (PPN 06/21 and PPN 03/23) – Mandatory documentation for suppliers bidding on major government contracts, outlining their carbon footprint reduction strategies.

Failure to provide clear, auditable evidence of Social Value contributions can result in contract rejection, making it essential for businesses to develop robust measurement and reporting processes.

Challenges and Barriers to Social Value Compliance

While the integration of Social Value into procurement provides clear societal benefits, businesses—particularly SMEs—face several challenges in adapting to these new requirements:

• Cost of Compliance – Implementing and tracking Social Value initiatives requires resources that smaller suppliers may lack.
• Complexity of Reporting – Navigating multiple frameworks and evidencing Social Value contributions can be a daunting task.
• Consistency Across Contracts – Different procurement authorities may interpret Social Value metrics differently, leading to inconsistent expectations.
• Long-Term Measurement – Many Social Value benefits, such as skills developmentand employment impact, take years to materialise, making short-term reporting difficult.

To overcome these barriers, businesses must adopt clear Social Value strategies, ensuring that they align their policies with national priorities and demonstrate meaningful contributions in procurement bids.

Procurement Act 2023 Readiness Checklist: Social Value Compliance

To successfully integrate Social Value into procurement strategies, businesses should:

	Conduct a Social Value audit to assess current contributions and identify improvement areas.
	Align company policies with a nationally recognised Social Value framework to ensure measurable impact.
	Develop clear reporting templates to evidence Social Value contributions in procurement bids.
	Train procurement and bid-writing teams on Social Value compliance requirements.
	Engage in partnerships with local communities, charities, and social enterprises to enhance Social Value initiatives.

Summary

The Procurement Act (2023) fundamentally changes the way Social Value is incorporated into public sector procurement. By making Social Value a legal requirement rather than an optional consideration, the Act ensures that government contracts contribute to economic, social, and environmental well-being.

For businesses, this presents both a challenge and an opportunity. Those that successfully integrate Social Value into their procurement strategies will not only enhance their competitiveness in public tenders but also contribute to a more sustainable and equitable economy.

The next section will explore the Competitive Procurement Process, detailing how businesses can effectively structure their bids under the new framework to maximise their success in securing government contracts.