Embedding social value at the heart of public service delivery. The Public Procurement Act 2023 – amplifying impact and unlocking funding for VCSEs?
The Public Procurement Act 2023, which came into force on 24 February 2025, marks a transformative moment for public procurement in the UK. For charities and social enterprises, this legislation is more than just a regulatory update—it's a strategic opportunity to amplify impact, unlock funding, and embed social value at the heart of public service delivery.
From "consider" to "have regard": A new legal duty
Under the previous Public Services (Social Value) Act 2012, contracting authorities were required to consider social value when procuring services. The 2023 Act raises the bar: authorities must now "have regard to the importance of maximising public benefit" when awarding contracts. This subtle but significant shift introduces a stronger legal obligation to prioritise social, economic, and environmental outcomes—not just price and efficiency.
What is social value in this context?
Social value refers to the additional benefits a contract can deliver beyond its core purpose. Examples include:
- Creating local jobs and apprenticeships
- Supporting environmental sustainability
- Promoting diversity and inclusion in supply chains
- Strengthening community resilience
The Act encourages a place-based approach, meaning procurement decisions should reflect the unique needs of local communities.
Key changes charities should know
- Most Advantageous Tender (MAT) The Act replaces the "Most Economically Advantageous Tender" (MEAT) with MAT, allowing authorities to evaluate bids based on broader criteria, including social value. This change empowers charities to compete on the strength of their mission and community impact—not just cost.
- Minimum weighting for social value
There is now mandated a minimum weighting for social value of 10% of the total scores available (or equivalent) in respect of a public tender exercise.
- Transparency and Accountability Authorities must now publish Key Performance Indicators (KPIs) for contracts over £5 million, including those related to social value. Suppliers will be held accountable through annual reviews and public reporting. Persistent underperformance could lead to debarment from future contracts.
- Support for SMEs and VCSEs The Act introduces a duty to remove barriers for small and voluntary sector organisations. This includes simplified procedures, more flexible frameworks, and dynamic markets that allow new suppliers to join over time.
- National Procurement Policy Statement (NPPS) Contracting authorities must align with the NPPS, which embeds social value into procurement strategy and links it to national priorities such as economic growth, sustainability, and community wellbeing.
What this means for charities
Whether you're bidding for contracts or acting as a contracting authority, the Act presents a unique opportunity to:
- Showcase your impact: Highlight your social value contributions in tenders.
- Collaborate early: Engage with buyers during pre-market consultations.
- Strengthen compliance: Update internal processes and train staff on the new rules.
- Leverage flexibility: Use the new procedures to tailor bids that reflect your strengths.
Next steps for charities
To prepare:
- Review your procurement and bidding strategies
- Develop measurable social value KPIs
- Familiarise yourself with the new terminology and digital platforms
- Seek legal or procurement advice if needed
Conclusion
The Public Procurement Act 2023 is not just a regulatory change—it's a call to action. For charities and social enterprises, it opens the door to greater influence, funding, and impact. By embracing the new emphasis on social value, the sector can help shape a more inclusive and sustainable future for public services.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
