Social value is doubling in weight on major central government contracts – are suppliers ready to deliver?
Echelon Consultancy and Skills Solutions Group respond to the Government’s new Social Value Model and what it could mean for organisations competing for public sector contracts.
The Government’s new Social Value Model represents a significant change in the role that jobs, skills and opportunities will play in major central government procurement.
From 1 January 2027, the new requirements will apply to in-scope central government procurements worth £1 million or more.
For contracts valued between £1 million and £5 million, social value will carry a minimum weighting of 10%. For contracts worth £5 million or more, that minimum increases to 20%.
For suppliers competing for major central government contracts, this is a significant development. Social value is becoming an increasingly important part of tender evaluation and, at a 20% weighting, could materially influence the outcome of a procurement.
Importantly, the new requirements are mandatory for central government departments, their executive agencies and non-departmental public bodies within scope.
They are not mandated by this PPN for local authorities, housing associations or other public sector contracting authorities, although those organisations may choose to adopt the approach.
More than a change in weighting
The increased weighting is only part of the story.
The revised Social Value Model has been streamlined around two core outcomes: Good Jobs and Skills.
The Skills outcome focuses on training and retraining, in-work progression and talent pipelines, with an emphasis on addressing skills shortages, creating opportunities for people facing barriers to employment and helping communities develop the skills needed to enter, remain in and progress within the workforce.
For suppliers, this creates both an opportunity and a challenge.
A strong social value proposition could become an important competitive differentiator. But ambitious commitments within a tender response are only the beginning.
The new policy also places clear emphasis on delivery, measurement and accountability. Social value commitments made during procurement should be monitored and measured through contractual mechanisms such as KPIs. For contracts worth £5 million or more, at least one specific social value KPI should be set.
In other words, organisations need to think not only about what they commit to at bid stage, but how those commitments will be delivered and evidenced once the contract is live.
Bringing procurement and workforce expertise together
This is where procurement and workforce strategy increasingly need to come together.
As partners, Echelon Consultancy and Skills Solutions Group bring together complementary expertise across public procurement and workforce development.
Echelon specialises in public procurement policy, helping organisations understand the changing procurement landscape and what evolving social value requirements mean for their approach to public sector opportunities.
Maximising social value through procurement has long been a focus for Echelon. As well as being co-authors of HACT’s Social Value and Procurement Toolkit, Echelon has developed its own Social Value Builder, underpinned by an Excel-based Social Value Matrix, to help clients identify impactful initiatives when procuring services. The model is used by many of the clients Echelon supports with procurement and has also been adapted by several national housing providers across their wider procurement portfolios.
Skills Solutions Group works with employers to identify workforce and skills needs and translate them into practical training, development and progression programmes that deliver meaningful and measurable outcomes.
Our partnership connects these two areas – helping organisations consider not only how they respond to social value requirements through the procurement process, but how the skills and workforce commitments behind those responses can be translated into credible delivery.
With the new Social Value Model increasing the weighting attached to social value on major central government contracts and strengthening the focus on measurable outcomes, we believe the connection between procurement expertise and practical workforce delivery will become increasingly important.
What about the wider public sector?
While the immediate requirement applies specifically to in-scope central government organisations, the new model could have wider significance.
The PPN explicitly states that other public sector contracting authorities may wish to adopt the approach.
That means local authorities, housing associations and organisations supplying the wider public sector should pay close attention to how the new model develops and whether its principles begin to influence procurement approaches more widely.
For suppliers, the question is no longer simply: “What social value can we promise?”
Increasingly, it is: “What can we credibly deliver, measure and prove?”
With the new model applying to relevant central government procurements from January 2027, now is the time for suppliers to start answering that question.
Echelon Consultancy and Skills Solutions Group are working in partnership to bring together procurement policy expertise and practical workforce and skills solutions, helping organisations understand and respond to the changing social value landscape.
