Guidance issued on applying revised social value model to central government procurements

In Procurement Policy Note 026 (PPN 026), issued in August, the Cabinet Office said in-scope organisations will have to apply a minimum 20% weighting to criteria set out in the revised social value model for all central government contracts valued at £5m or above.

PPN 026 also said that for contracts valued at £1m and above, but less than £5m, in-scope organisations would have to apply a minimum 10% weighting (or equivalent measurement).

The social value model, which is set out as an annex to PPN 026, is intended to “prioritise British jobs, skills, and opportunities for people facing barriers to employment within our local communities”. It is split into two outcomes, (1) Good jobs and (2) Skills, with six award criteria.

PPN 026 applies only to central government departments, their executive agencies and non-departmental public bodies ('in-scope organisations'), although the Cabinet Office said that other public sector contracting authorities may wish to adopt the approach set out.

The 32-page guidance, issued this week, covers the four stages of the commercial lifecycle - ‘Plan’, ‘Define’, ‘Assess’ and ‘Manage’ - and corresponding actions.

There are also the following annexes: Additional measures to maximise social value model outcomes; the Social Value Model; Evaluation: Model Score-allocation Method; Template letter for community programme contracts; and Further information on social value and value for money.

The Cabinet Office guidance says: “The government wants taxpayers’ money to be spent in a way that values and invests in local communities. For in-scope central government contracting authorities, social value through procurement using the Social Value Model is defined as: ‘taking account of how a supplier will work for our communities to provide good British jobs, skills and opportunities in every postcode’.”

It adds: “You should apply this guidance in compliance with legal requirements and international obligations. Departing from this guidance is permitted when necessary to comply with international agreements, and to keep requirements relevant and proportionate and ensure fair treatment and non-discrimination.”