Public procurement these days is not just about acquiring goods and public services at low costs. Nowadays, it focuses on delivering long-term benefits to communities, promoting inclusivity, and driving societal progress. Social value is a transformative approach shaping how public contracts are awarded and executed. Let us have a closer look at how social value is revolutionising procurement and paving the way for meaningful community impact and environmental benefits.
What Is Social Value In Public Procurement?
Social value is directed toward the broader benefits that procurement and government’s commercial activities can bring to society, the economy, and the environment. It involves asking: Beyond the immediate deliverables, how does this procurement positively impact communities?
- Beyond the Bottom Line: Social value prioritises community well-being over just financial efficiency. For instance, social value public sector contracts to build infrastructure might also aim to create local jobs or upskill workers.
- Inclusive Opportunities: Public procurement can be a tool to promote equality, diversity, and inclusion by prioritising contracts with suppliers committed to these ideals.
- Sustainability Focus: Many social value frameworks incorporate environmental sustainability, such as reducing carbon footprints or promoting green practices through supply chains.
Why Does Social Value Matter In Public Procurement?
Here is why social value initiatives matter in public procurement:
Procurement becomes a vehicle for creating jobs in public sector organisations. It enhances the skills and addresses social challenges such as homelessness and unemployment. Citizens want to see that public spending aligns with societal needs. By focusing on social value, governments demonstrate accountability and purpose.
Furthermore, it prioritises initiatives that empower underrepresented groups, promote fair wages, and foster inclusive growth in the local economy. It also aligns with global goals like reducing greenhouse gas emissions and promoting sustainable development.
Source: https://www.statista.com/statistics/1489795/public-sector-consulting-procurement-spend-uk/
Key Components Of Social Value In Public Procurement Process
Economic impact
The significance of public procurement is immense, as it places orders that help to generate employment opportunities. Governments may collaborate with small and medium-sized enterprises (SMEs) and minority-owned businesses to increase participation. Supporting these entities is helpful not only in enhancing economic diversity but also in strengthening local networks.
Moreover, by channelling resources to upskilling programs in low-income communities, a fairer and more diverse workforce is achieved. This workforce is also ready for sustainable job opportunities. All these initiatives are put together to achieve economic empowerment of the communities.
Social Value
Social value in procurement can be an excellent way to further promote diversity, equity and inclusion (DEI) in different domains. Procurement gives charities and other socially oriented organisations an opportunity to implement educational or health programs for the youth.
Tackling broader social issues, such as the provision of low-cost housing or mental health services, practically ensures that every taxpayer’s money is spent in a way that transforms people’s lives. This benefits society as a whole.
Environmental impact
Another facet of social value procurement is environmental sustainability. Suppliers in the economy are expected to reduce their carbon footprints and demonstrate effective means of maintaining green approaches. This is why government agencies are setting sustainability targets for suppliers. Contracts that seek to provide energy-efficient solutions and implement waste-minimisation strategies to promote activities with minimal environmental impact.
In addition, the use of renewable resources also assists the procurement processes to meet set environmental targets for the future. Such measures not only solve the current ecological challenges but also create structures for the future where environmental protection and development are complementary.
Governance
Strong governance is critical to ensure social value objectives are met effectively. Transparent criteria for evaluating social value proposals allow for fair competition among suppliers while keeping them liable for their commitments. Ethical labour standards are non-negotiable, ensuring workers’ rights and well-being are protected throughout the supply chain. Anti-corruption policies further reinforce integrity in procurement, safeguarding public funds and fostering trust in government processes. Together, these governance measures ensure that public sector buyers uphold the principles of fairness, ethics, and accountability.
Legislation & Frameworks Supporting Social Value Objectives
Social value frameworks vary globally but share a unified purpose: creating a better world through procurement.
Procurement Act Social Value 2023
This Social Value Act requires public entities to consider social, economic, and environmental benefits when awarding contracts.
European Union Procurement Directives
These directives emphasise transparency, equal treatment, and the inclusion of sustainability goals in procurement decisions.
Sustainable Development Goals (SDGs)
Sustainable public procurement practices often aligns with the UN’s SDGs, particularly goals related to decent work, reduced inequalities, and climate action.
Local Frameworks
Cities and regions may have tailored strategies that address unique challenges, such as affordable housing or improving public transportation.
How To Embed Social Value In The Public Procurement Process?
A structured approach is essential for embedding social value in procurement process. Here’s how one can go ahead with it:
Policy development
Establishing clear policies is fundamental to integrating social value in procurement. These policies should explicitly outline objectives such as promoting local employment, sustainability and inclusivity. Aligning these goals with community priorities and adhering to legal requirements ensures a balanced approach.
Clear policies serve as a roadmap in guiding procurement teams and suppliers toward achieving meaningful and measurable outcomes that benefit society.
Market engagement
Interacting with the market is necessary so that social value is integrated into the procurement processes. Conducting supplier training workshops communicates reasonable expectations and helps achieve consensus on social value principles.
Working with SMEs and local businesses enhances their ability to seek tenders, thus fostering inclusiveness and innovation. These initiatives make it possible for suppliers to implement social value model obligations more efficiently.
Evaluation criteria
A weighted scoring system, particularly in relation to social value, guarantees that fairness is present alongside a clear prioritisation of desired outcomes in procurement processes. Social value requirements being made part of contracts makes the requirements enforceable with recourse to them for noncompliance.
Such an organised approach invites suppliers to consider social value within their supply chains with firm guarantees on the outcomes sought realities on the ground.
Monitoring and reporting
Accountability is critical for earning the social licence, as well as trust and support from stakeholders. It requires measuring and disclosing social value contributions. Designing robust metrics enables the monitoring of transformations being experienced, such as employment generation and sustainability.
Reporting results enhances accountability and assists in measuring the effectiveness of procurement strategies. Moreover, consistent reporting helps identify gaps that support achieving objectives, ultimately aimed at providing social returns to society.
How Does Tracker Intelligence Help In All This?
Tracker Intelligence enables organisations to enhance the social value of procurement through innovative functionalities and data interpretation. Let’s see how Tracker Intelligence enables performance-driven procurement that benefits the community:
Market analytics
Tracker Intelligence assists retailers in identifying suppliers who possess social value perspectives, such as local or environment-friendly firms, etc. Hence, the contracts should be aimed at achieving favourable outcomes for the community. Our market analytics feature will assess the social value of tenders by providing real-time insights into community impact, enabling you to make more informed, socially responsible decisions. By analysing competitors and bid requirements, it ensures your public procurement strategies align with key social value objectives, driving positive community outcomes.
Spend analytics
It is also essential to utilise detailed spending analytics feature. It helps you efficiently in analysing the spending trends in the public sector. With this, you can get information about your competitors and their pricing strategy and then stay ahead of them. You can do this by focusing on social values while devising your pricing strategy.
Tracker Intelligence’s customisable dashboards
Tracker Pro’s customisable dashboard puts the power of social value front and center in your public procurement strategy.. With real-time updates and detailed market insights, you’ll be able to quickly assess how potential contracts contribute to social value, enabling you to make strategic decisions that drive meaningful change in your community. Moreover, you will get the finest user experience with this ergonomically customised widget.
Tender alerts
With our tender alerts service, you can get information and alerts on contracts or suppliers that focus on social value objectives. With this feature, you are never going to miss out on any tender alerts. It will also help you stay adept with the Social value tender criteria and every information will be sent straight to your inbox.
The Future Trends In Social Value Procurement
One can expect the following trends in social value procurement:
- Don’t be surprised if social impact is measured more effectively and its benefits are predicted into the future, thanks to advanced analytics that support evidence-based decision-making.
- Even blockchain and AI will become standard digital tools that will enable the improvement of traceability and transparency across the supply chains.
- While governments tend to maximise procurement procedures, carbon reduction targets will also be set so that environmental concerns take precedence over procurement ones.
- Through the cooperation of the public, private sector, and non-profit organisations, diverse procurement models will implement innovative solutions for social value.
Building A Better Future Through Social Value
Social value in public procurement isn’t just a buzzword—it’s a transformative approach that redefines the role of government spending in society. By embedding social value into procurement processes, we unlock a future that prioritises community well-being, sustainability, and equity.
Every contract becomes an opportunity to make a difference—whether it’s by creating jobs, supporting local businesses, or tackling environmental challenges. As procurement evolves, so does its potential to build a better, fairer world.
So, let’s embrace this vision. By fostering collaboration, innovation, and accountability, social value procurement will remain a powerful force for driving community impact long into the future.
