In February 2025, the Cabinet Office published Procurement Policy Note (PPN) 002: 'Taking account of social value in the award of central government contracts'.
This article summarises what this PPN says, and what it means for procurement teams and private sector suppliers.
Skip ahead to read about:
- Context: what is PPN 002?
- Who does PPN 002 apply to?
- What does the PPN say?
- What does this mean for buyers?
- What does this mean for suppliers?
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📖 Context: what is PPN 002?
Just one week before the Procurement Act's go-live date on February 24th 2025, the Cabinet Office published two new PPNs and a new National Procurement Policy Statement (NPPS), set to go live on the same day as the Act.
One of these PPNs, 002, introduces a new 'Social Value Model' that certain contracting authorities must use.
Whilst 'social value' is not once being explicitly mentioned in the Procurement Act itself, the NPPS instructs contracting authorities that they must consider how they can promote social value in their procurement.
Moreover, the Public Services (Social Value) Act 2012 requires public bodies to consider social value for services contracts.
PPN 002 lays out a 'Social Value Model' for contracting authorities to use when constructing social value questions and criteria.
✋ Who does PPN 002 apply to?
The PPN applies to all Central Government bodies (including their Executive Agencies and Non-Departmental public bodies), but "other contracting authorities may wish to apply the approach set out" by the PPN.
The PPN does not apply to private utilities contracts, below-threshold contracts, or to Ministry of Defence security or defence contracts (as defined under Section 7 of the Procurement Act)
In-scope authorities should apply the PPN on or after October 1st, 2025.
💡 What does the PPN say?
PPN 002 reiterates that in-scope contracting authorities must consider social value when awarding contracts.
Specifically, in-scope organisations must "apply a minimum 10% weighting (or equivalent measurement) of the total score, for social value".
When doing so, in-scope authorities should utilise the 'Social Value Model'.
The Model provides authorities with a pre-built set of goals and success criteria that they can use when implementing social value in their tenders.
The government breaks down how to use the Model into 3 steps:
Step 1
"Select an Outcome from PPN 002 Social Value Model that relates to the subject matter of the contract, is proportionate and non-discriminatory."
There are 8 total Outcomes to choose from, each relating to one of the government's 5 key missions (as outlined in the NPPS):
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Mission 1: Kick start economic growth
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Outcome 1: Fair work
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Outcome 2: Skills for growth
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Outcome 3: Resilient, innovative and flexible supply chain
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Mission 2: Make Britain a clean energy superpower
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Outcome 4: Sustainable procurement practices
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Mission 3: Take back our streets
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Outcome 5: Support the reduction in crime
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Mission 4: Break down barriers to opportunity
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Outcome 6: Employment and training for those who face barriers to employment
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Outcome 7: Creating a pipeline of opportunities for the contract workforce, reducing barriers to entry for under-represented groups
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Mission 5: Build an NHS fit for the future
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Outcome 8: Increasing productivity through physical and mental wellbeing - in the supply chain and communities in the relevant area
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Each Outcome has a pre-written set of award criteria and sub-criteria.
Outcome 2's (Skills for Growth) award criteria, for example, is: "Learning and skills development opportunities relevant to the contract to address skills gaps". The sub-critera then lays this goal out in more detail.
Contracting authorities are encouraged to include social value in Preliminary Market Engagements so that prospective suppliers can have a voice in selecting which social value outcomes are achievable and appropriate.
Step 2
Contracting authorities should then copy/paste the provided 'Model social value question' into the tender document, and edit/refine it according to the condition of the market and the nature of the contract at hand:
To see the full template, head to the PPN 002 Social Value Model document.
Step 3
Finally, contracting authorities should the chosen Outcome's 'model award criteria' and 'sub criteria' into the template.
Once again, these criteria may be refined and/or modified based on the market and contract.
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Further guidance on how contracting authorities should implement the Model is provided in an accompany 'Guide to using the PPN002 Social Value Model' document.
🌱 What does this mean for buyers?
From October 1st, in-scope contracting authorities must utilise the Social Value Model when implementing social value requirements into their tenders.
Relevant procurement teams must be up-to-speed on what the Model is, how you should choose which Outcomes to prioritise during the tender process, and then how to measure and assess them once submissions have come in.
Even if your authority isn’t required to follow this PPN, it’s still worth reviewing the Model. The National Procurement Policy Statement mandates that all relevant contracting authorities consider the government's key priorities in procurement - this Model offers a structured approach to do just that.
This update reinforces the Labour government’s commitment to social value in public procurement, even though the Procurement Act itself doesn’t explicitly reference it.
💼 What does this mean for suppliers?
After October 1st, suppliers bidding on in-scope authorities' tenders should expect to see the Model being used in tender documents.
Use this time to familiarise yourself with the Model, and how contracting authorities will be assessing social value via it.
Namely, you should anticipate which of the 8 target Outcomes you're likely to target as part of your public sector offering.
Responses need to include a "method statement and project plan, the specific, measurable and time bound commitment(s) your organisation will make to deliver".
So consider: do we already address these Outcomes' 'model award criteria'? How might we need to change our current business practices or priorities in order to do so? How can we measurably show this?
Remember, contracting authorities are being encouraged to discuss which Outcomes they should prioritise during the pre-market engagement process - so make sure to leverage these engagements where possible.
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PPN 002 gives contracting authorities a ready-made framework to apply the National Procurement Policy Statement's goal of promoting social value.
Buyers and suppliers alike should familiarise themselves with the Model ahead of its implementation on October 1st 2025.
For more details, refer to the PPN's full guide document.
Social value has resurfaced as a key procurement theme under the National Procurement Policy Statement.
Tussell is already helping Central, Local and NHS procurement teams to find new SMEs, VCSEs and local businesses they could work with - and to benchmark their social value offering against their neighbours.
See how it works by booking in time with our team.
