The Importance of Social Value in Tenders

Social value sits alongside price and quality as a core part of how public sector buyers score tenders. It's your opportunity to show how a contract will benefit jobs, skills, communities and the environment, on top of the core goods, works or services being delivered. For major central government procurements covered by the new Social Value Model, it can account for at least 20% of the tender score.

Requirements differ between buyers, sectors and contracts, so there isn't one social value formula that works everywhere. This guide covers where the requirements come from, what's changing under the government's new PPN 026 Social Value Model, how that sits alongside the TOM System still used by many other buyers, and how to build commitments that actually win marks.

What Is Social Value?

Social value refers to the benefits created through contract delivery beyond the core goods, works or services being purchased, things like employment, skills, fair working practices, local economic opportunities, community support and environmental sustainability. The underlying idea is that public spending can achieve wider benefits alongside successful contract delivery.

For suppliers, social value shouldn't be treated as a collection of generic CSR activities. A strong tender commitment needs to be relevant to the contract, proportionate to the opportunity, and credible enough to deliver and evidence. A construction contractor committing to work with local colleges on skills shortages directly connected to its future labour needs will always score better than a generic pledge to "support the community."

Why Is Social Value Important in Tenders?

Social value gives public sector buyers an opportunity to achieve wider benefits through the contracts they award, alongside securing the goods, works or services they need.

Depending on the buyer and procurement, that might include creating employment and skills opportunities, strengthening local supply chains, supporting communities or contributing to environmental objectives.

For suppliers, this makes social value more than an additional section of the tender response. Where it forms part of the award criteria, the commitments you make can directly affect your score and may then become obligations that need to be delivered, evidenced and reported throughout the contract.

Well-designed social value requirements can also encourage suppliers to find new ways of creating wider benefits through contract delivery, rather than treating social value as a separate collection of charitable or CSR activities.

The strongest proposals connect these wider benefits directly to the contract and the buyer's priorities. Generic community initiatives may be worthwhile, but they won't necessarily strengthen a tender unless they address the outcomes the buyer is trying to achieve.

Where the Requirements Come From

The Public Services (Social Value) Act 2012

The Public Services (Social Value) Act 2012 was the first major step in embedding social value in public procurement. It came into force in January 2013 and requires relevant contracting authorities to consider how certain services procurements could improve the economic, social and environmental wellbeing of the relevant area.

There's an important distinction for suppliers here: the Act primarily places duties on contracting authorities, not bidders, and its direct scope is narrower than often assumed. It applies to certain above-threshold services procurements and relevant frameworks; goods and works contracts on their own aren't covered by the Act itself, although social value requirements can still apply to them through other procurement policies and buyer-specific approaches. This is one reason to read the requirements of each individual procurement rather than relying on a standard social value response.

Social Value and the Procurement Act 2023

The Procurement Act 2023, in force since February 2025, provides the wider legislative framework for much of public procurement in England, Wales and Northern Ireland. Social value hasn't been replaced by the Act; it operates within this wider regime. When applying the new Social Value Model, central government organisations must ensure the award criteria they select relate to the subject matter of the contract and are proportionate, treat suppliers equally, and don't unlawfully discriminate against suppliers covered by the UK's international trade agreements.

For bidders, the principle that follows is straightforward: social value should relate to how the contract will be delivered, not become a separate collection of unrelated corporate promises.

PPN 026: The Social Value Model for Central Government Contracts

The government published PPN 026: The Social Value Model on 5 August 2026. From 1 January 2027, it will replace the previous model used in central government procurement. It's deliberately streamlined into two outcomes and six award criteria, focused on good jobs and skills development rather than a broader list of competing themes.

Outcome 1: Good Jobs

Good employment opportunities in every postcode, covering three award criteria:

• 1a. Create and/or retain high quality jobs - recruitment and retention practices that support economic growth and address relevant skills shortages
• 1b. Fair working conditions - going beyond the statutory minimum, including support for people facing barriers to staying in work
• 1c. Fair pay - progressive remuneration that goes further than the statutory national minimum wage

Outcome 2: Skills

Learning and development activity that addresses skills shortages, covering three further award criteria:

• 2a. Training and retraining - activity that addresses relevant skills shortages and/or supports people facing barriers to employment, including approaches such as apprenticeships and work placements
• 2b. In-work progression - helping the contract workforce move into higher paid work through new skills training
• 2c. Talent pipeline - building a pipeline of future talent, particularly in areas of multiple deprivation

Scope, Weighting and Reporting

PPN 026 applies to central government departments, their executive agencies and non-departmental public bodies, for procurements commenced on or after 1 January 2027 and valued at £1m or more (inclusive of VAT). Other buyers, including local councils, the NHS and housing associations, aren't required to adopt it, though some may choose to over time, so don't assume every public contract from 2027 onward will use PPN 026.

Where it applies, contracts valued between £1m and £5m carry a minimum social value weighting of 10%, rising to a minimum of 20% for contracts of £5m or above. For contracts of £5m or more, buyers must also set at least one social value KPI, published and reported on via the central digital platform at least annually. Evidence of poor performance against social value KPIs can also be taken into account when considering whether to exclude a supplier from future tenders, so unrealistic commitments carry real risk once a contract is live.

A transition period applies: procurements commenced before 1 January 2027 may continue using the previous model where moving to the new version would require disproportionate resources or undermine prior market engagement. Always check which model the specific procurement documents reference.

Detailed sub-criteria, a practitioner guidance document and a "List of Community Programmes" resource are due in autumn 2026. We'll update this page once that guidance is published, in the meantime, treat the outcomes above as the framework to build your response around for in-scope contracts.

Has Environmental Social Value Disappeared?

No. PPN 026 streamlines the model used for relevant central government procurements around jobs and skills specifically, but that doesn't mean environmental sustainability, community benefit or other social outcomes have stopped mattering across public procurement generally. Other contracting authorities set their own priorities, and environmental requirements can still feature elsewhere in the specification, award criteria or wider procurement strategy. Understanding the relevant model matters, but understanding the buyer, contract and community matters more.

The TOM System and Other Buyer Approaches

PPN 026 doesn't replace the Social Value TOM (Themes, Outcomes, Measures) System, still often called the National TOMs, which remains widely used by local authorities, the NHS, housing associations and other public bodies outside PPN 026's scope. Developed by Social Value Portal, the TOM System is currently structured around four themes: Work (employment opportunities), Economy (inclusive growth and local business support), Community (empowering communities and wellbeing), and Planet (environmental protection).

The Social Value Model and the TOM System aren't interchangeable, and a buyer may use TOM measures, its own framework, or another approach entirely. If a tender specifically asks you to use TOMs, you need to understand the measures selected by that buyer and the evidence required to support your commitments. If you're bidding into a local authority, NHS or housing tender, don't assume PPN 026's outcomes apply, check the buyer's own social value policy or the tender documents to confirm which model is in use.

Read our guide to the National TOMs and the Social Value TOM System and our comparison of the Social Value Model and TOMs for more detail.

Social Value for SMEs

SMEs shouldn't assume social value automatically favours larger suppliers with bigger budgets. PPN 026 specifically requires central government organisations to consider market conditions, including the presence of SMEs and voluntary, community and social enterprises, when choosing which award criteria to apply, so as not to create unnecessary barriers to participation.

Smaller suppliers often have real advantages here: strong local employment links, established relationships with colleges or community organisations, a flexible approach to recruitment, and clear evidence of the effect their business already has in a particular area. The important part is turning those strengths into commitments that are relevant, measurable and proportionate. A £1m contract and a £100m contract shouldn't require identical social value offers.

Building Credible Social Value Commitments

The strongest starting point is always the tender documentation itself: the outcome the buyer wants, the evaluation criteria, any local priorities identified, the scoring methodology, and the evidence or reporting expected. From there, work out which commitments your organisation can genuinely deliver through that specific contract.

Before finalising a commitment, sense-check that it is relevant to the buyer and contract, proportionate to the size and duration of the opportunity, and genuinely deliverable by your organisation.

A commitment can sound attractive in a tender response but still create problems if the delivery team hasn't agreed it, the necessary partners aren't in place or the level of activity isn't realistic for the contract. Testing commitments internally before submission helps balance ambition with credible delivery.

Existing experience is useful evidence, but a track record and a new commitment aren't the same thing. Your response needs to make clear what you'll deliver, who benefits, how it relates to the contract, when activity will happen, and how you'll measure the result. Ownership matters too: if your bid promises ten work placements, someone needs responsibility for arranging them; if a delivery partner is central to your proposal, their involvement should be established before submission, not assumed.

Example Social Value Tender Questions

For central government contracts under PPN 026, expect questions to map to the Good Jobs and Skills outcomes above, for example:

• How will your organisation create or retain high quality jobs through this contract?
• What fair working conditions and pay will you offer the contract workforce?
• How will you address skills shortages through training, retraining or apprenticeships?
• How will you support in-work progression for your contract workforce?
• How will you build a talent pipeline for people facing barriers to employment?

Local authority and other non-central-government tenders may still ask questions structured around the TOM System's four themes, so always check the buyer's own social value policy or the ITT before you start writing. For a detailed walkthrough of structuring your answers, including SMART commitment tables, value-ratio scoring and sector-specific examples, see our full guide to answering social value tender questions.

Creating a Social Value Delivery Plan

Many of our clients create Social Value Delivery Plans which outline the commitments they're going to make, how these will be actioned, by whom, and to what timescale, often alongside a Social Value Method Statement setting out the proposed delivery methodology. These plans need to be as specific to the bid, area and proposed measures as possible.

Developing your social value approach before a live deadline makes bidding considerably easier. Speak to HR, operations, sustainability and supply chain teams, not just the bid team, to build a bank of previous examples and evidence. When a tender does arrive, the task becomes tailoring existing capability to the buyer and contract rather than inventing a strategy from scratch.

If you need additional training on social value ahead of your next bid, Thornton & Lowe can support you. Check out our upcoming training dates.

How Thornton & Lowe Can Help

Social value requirements are changing, particularly for businesses targeting major central government contracts. At Thornton & Lowe, we write social value responses for our clients every day, whether the buyer is applying the new PPN 026 Social Value Model or the established TOM System. These range from method statements and delivery plans to calculator and social value portal responses. We also provide bid review of social value responses, offering guidance on where to improve.

A key part of where we add value is suggesting the initiatives most likely to resonate with a specific buyer, and preparing a compelling social value "menu" that reflects the industry or service being delivered. Our social value bid writing service can support individual bids or help develop a wider social value strategy, and our bid templates include completed social value tender answers for you to tailor.