The vast majority of tender submissions contain a written social value element, requiring bidders to outline what value they can provide as a result of contract award. We review how PPN002 will impact social value in bidding, the new award criteria and what bidders should do in the interim to produce high-quality, competitive social value offerings.
What is PPN002?
Procurement policy notes or PPNs issue guidance or new policies to be applied to public sector procurement – normally central government authorities.
PPN002 introduces a new social value model which aligns with the Public Services (Social Value) Act 2012, Procurement Act 2023 and the National Procurement Policy Statement, demonstrating that social value is still at the heart of public sector procurement.
Guidance in PPN002 includes a model social value question template authorities can use as part of the tender process:
It is important to note that the model and award criteria under PPN002 is not currently mandatory – although contracting authorities can use their discretion for the time being, it will formally come into force from 1 October 2025.
Outlining the new award criteria
PPN002 outlines new and updated model award criteria (MACs) for contracting authorities to consider as part of the tender process. Split into eight different categories, they comprise:
| Outcome
|
Model award criteria | Reporting metric |
| 1. Fair work offering fair wages and good working conditions, alongside helping people to get a job, stay in work and achieve career progression. | 1a. Create and retain high-quality jobs
1b. Fair working conditions
1c. Fair pay practices
1d. In-work progression to help people to move into work by developing new skills
1e. Identifying and managing risks of modern slavery. |
1a. Number of employment and apprenticeship opportunities created under the contract, by UK region
1b. Number of people working on the contract with a permanent employment contract
1c. Number of people paid at and above the UK Living Wage
1d. Number of person hours of staff in-work progression upskilling delivered through training
1e. Number of tier 1 and 2 suppliers who have been audited/assessed and number of staff who have completed modern slavery training within 90 days of joining the organisation. |
| 2. Skills for growth supporting growth sectors and addressing skills gaps. | 2a. Learning and skills development opportunities relevant to the contract to address skills gaps. | 2a. Number of training opportunities (other than apprentices) created or retained on the contract or number of people hours of learning interventions delivered. |
| 3. Resilient, innovative and flexible supply chains supporting economic growth by enabling resilient businesses and creating opportunities for SMEs and VCSEs. | 3a. Creating a diverse supply chain, including new businesses, SMEs and VCSEs
3b. Collaborating in design and delivery with communities and anchor partners. |
3a. Direct spend with start-ups, SMEs, VCSEs and mutuals over the contract term
3b. Number of engagement activities with the community, representatives and other anchor institutions in the local area. |
| 4. Sustainable procurement practices reducing carbon footprints, minimising waste and promoting the use of clean energy and green technologies. | 4a. Deliver additional environmental benefits, including working towards zero GHG emissions and use of clean energy and green technologies
4b. Influence staff, suppliers, customers and communities through the delivery of the contract to support climate and nature protection and improvement. |
4a. Metric tonnes in carbon emissions reductions, litres of water saved, metric tonnes of waste reduced from landfill and m2 of green spaces created.
4b. Number of hours spent influencing staff, customers and communities to support the environment. |
| 5. Support the reduction in crime via community cohesion, awareness raising and action. | 5a. Influence staff, suppliers, customers and communities through the delivery of the contract to support reduction in domestic abuse. | 5a. Number of hours learning interventions to raise awareness of the risk of domestic abuse. |
| 6. Employment and training for those who face barriers to employment | 6a. Create employment and training opportunities, particularly for those who face barriers to employment and/or are located in deprived areas
6b. Demonstrate action to increase the representation of disabled people in the contract workforce
6c. Demonstrate action to identify and tackle inequality in employment, skills and pay in the contract workforce. |
6a. Number of employment opportunities created under the contract for individuals from under-represented groups and number of apprenticeship opportunities (Level 2, 3 and 4+) created or retained for people from under-represented groups
6b. Number of employment opportunities and apprenticeships created for disabled people
6c. Number of people from under-represented groups with flexible working arrangements and other training schemes |
| 7. Creating a pipeline of opportunities for the contract workforce including reducing the barriers to entry for under-represented groups. | 7a. Remove barriers to entry for young people and under-represented groups, facilitating access to training, placements, apprenticeships and other educational and developmental opportunities
7b. Create a pipeline of opportunities for the future contract workforce. |
7a. Number of people from under-represented groups employed on the contract
7b. Number of outreach activities delivered under the contract. |
| 8. Increasing productivity through physical and mental wellbeing both within the supply chain and communities in the contract’s relevant area. | 8a. Support health and wellbeing in the contract workforce, including physical and mental health. | 8a. Number of hours spent setting up and delivering staff wellbeing. |
Notably, the MACs around recovering from the impacts of COVID-19 have been removed from the PPN002 Social Value Model.
What public sector tenders will be impacted?
All central government authorities – including the Department for Education, Cabinet Office, DEFRA and their arms-length bodies (e.g. CCS) will have to adhere to PPN002 as ‘in-scope’ organisations.
However, sub-central authorities such as local councils, housing associations and integrated care boards may also choose to employ it as part of their social value strategy. Alternatively, sub-central authorities are free to design their own social value procurement strategy according to their requirements – including adopting other models or templates, such as the social value TOMs model.
What does this mean for bidders?
For organisations looking to bid for public sector contracts, social value can be the difference between a winning and losing bid. In some instances, the social value element of the submission can comprise up to 25% of the evaluation criteria – meaning it is a critical part of your bid strategy. As such, we advise the following:
Begin reviewing potential commitments against MACs
Frequent bidders will understandably have model responses or commitments against the old MACs under PPN 06/20. Your bid team should review the new MACs and begin thinking about the sort of initiatives you can feasibly commit to – ensuring these are targeted, tangible and scalable to the overall value of the contract.
Measure targets against the relevant metric
Per the table above, each MAC has prescribed metrics against which you must measure commitments:
- Double-check metrics are correct in the response, e.g. number of hours rather than sessions delivered
- Introduce timescales for each commitment – for instance, explicitly defining whether the target metrics are per annum or over the contract term
- Mirror definitions introduced by the contracting authority, such as UK NUTS region codes for ‘local area’ commitments.
Make sure you are not double counting commitments
A common mistake bidders make is ‘double counting’ their social value commitments when completing their tender submission. For instance, the number of employment opportunities created under 1a. must be separate from those created under 6a. If you include the same employment opportunities for both, your tender may be marked down or even disqualified.
During your bid review, double-check all of your social value commitments to ensure this hasn’t happened during the writing process and make amendments as necessary.
Social value bid support
Our bid and tender services can be tailored to the social value needs of your organisation, including:
- Bid writing support for social value, where one of our expert bid writers consults with your subject matter experts to produce a social value response or method statement
- Bid review services, involving a senior member of the team reviewing your social value response, leaving targeted comments for suggestions and enhancements
- Social value training for those with a new or existing bid team, reinforcing and teaching the principles of social value and what comprises a strong social value offering.
To discuss further, our sales and marketing team are contactable at info@executivecompass.co.uk or via telephone 0800 612 5563 for an informal chat or free, no-obligation quote.