Public procurement in the UK is evolving again.
The UK’s Procurement Act 2023 came into effect on 24 February 2025, changing the way companies bid for public sector contracts by integrating Social Value as a key component.
New thresholds coming into effect on January 1, 2026, mean that even more contracts will need to include the mandatory Social Value evaluation. Here’s what you need to know!
To put it simply, if you don’t comply with the Social Value requirements, you won’t meet the mandatory 10% weighting, and your bid will be ineligible. And with the limits being lower from January 1, 2026, more bids will need to incorporate Social Value.
There’s also the danger of reputational damage. For larger contracts, the delivery of KPIs is subject to annual public reporting. If a company fails to deliver on its Social Value promises, this failure will be publicly visible. This can harm the company’s standing and risk its exclusion from future bidding opportunities.
Finally, there is lost value. Businesses often miss opportunities to effectively track and demonstrate their positive social and environmental impacts, which means their positive work goes undocumented and unrecognised.
Here’s a table outlining the previous thresholds and the new ones coming into effect in 2026.
| Contract Type | Current Threshold (2024–2025) (incl. VAT) | New Threshold (From 1 Jan 2026) (incl. VAT) |
| Central Government | £139,688 | £135,018 |
| Sub-Central Authorities (e.g., Local Authorities) (Supplies & Services) | £214,904 | £207,720 |
| Works & Concessions | £5,372,609 | £5,193,000 |
| Utilities | £429,809 | £415,440 |
With Social Value often weighted between 10% and 25%, it’s often the deciding factor in competitive bids. The key to success is providing detailed, verifiable data, which consistently outperforms vague or general promises.
Successfully delivering Social Value commitments increases client trust. By providing clear impact data, a business establishes deep trust with public sector clients.
Social Value data also helps build a data-driven strategy, informing important business decisions, pinpointing areas where the company can have the greatest positive impact, and providing justification for investing in sustainability initiatives.
Need an explainer on what the Procurement Act 2023 actually is? Then read on below…
The Act essentially reforms the UK’s procurement system to make it simpler, more transparent, and, most importantly, focused on delivering “public benefit.”
The old system awarded contracts based on the Most Economically Advantageous Tender (MEAT), which often prioritised the lowest price. The new system awards contracts based on the Most Advantageous Tender (MAT).
This gives contracting authorities, including councils, NHS trusts, and government departments, the power to consider a broader range of value, explicitly incorporating social and environmental outcomes alongside cost and quality.
While the 2012 Social Value Act only required authorities to ‘consider’ social value, the new Act means that Social Value is given a minimum weighting of 10% in the overall tender score for central government contracts (and often more for local authorities).
Public bodies now have a legal duty to set clear objectives aligned with the National Procurement Policy Statement (NPPS), which focuses on:
For contracts over £5 million, authorities must publish KPIs, ensuring suppliers don’t just promise Social Value – they must measure and report on it annually.
Axiom is the only All-In-One sustainability platform, providing you with all the tools you need to quickly and efficiently prove your Social Value. Our software is built in line with the UK Government Social Model using both PPN 06/20 and PPN 02, which means organisations can use both models and also add metrics on the go with our unique mobile app.
One common problem is that clients often track data across spreadsheets and disparate systems. Our software maps all operational data (e.g., carbon emissions from plant/transport, local labour hours, apprenticeship numbers, material sourcing, etc.) into one single platform, which can then be easily exported for bids and tenders.
The Act requires suppliers to set and report against KPIs. Axiom’s platform allows clients to set target metrics, providing the auditable evidence needed for the annual KPI review required under the Act.
Building the Social Value narrative for a tender takes time and specific data – a major bottleneck in the bidding process.
As the only All-In-One sustainability platform, Axiom’s dashboard has the Social Value data your tender needs, drastically speeding up the application process.
To stay competitive and compliant, you must update your internal processes:
AXIOM is a powerful cloud-based platform that helps your business monitor, analyse and improve sustainability performance.
Using specialist technology, we equip businesses with a tool which enables them to track their environmental and social performance whilst also improving governance – identifying and mitigating risks associated with business operations and relationships.
Book your free demo here.
