All public contracts in England and Wales are required to have a minimum of 10% weighting for social value from today (24 February).
The Procurement Act 2023 requires public sector clients to consider social value in all their procurement decisions to ensure that projects contribute to community development and sustainability targets.
Although 10% is the minimum, contracting authorities may apply a higher weighting depending on the specific procurement and its social impact potential.
The Act changes how the public sector assesses bids from ‘most economically advantageous tender’ (MEAT) to ‘most advantageous tender’ (MAT).
This approach means that tenders are not solely considered on their price, but also their social value and public benefit.
The legislation also introduces mandatory 30-day payment terms for all contracts and subcontracts.
The government has published a National Procurement Policy Statement setting out the principles that apply to public sector clients.
‘A great leap forward’
The Construction Leadership Council has welcomed the legislation as “the start of a new era for public procurement in this country” through a system “designed and developed in the UK to meet our needs”. It has published new guidance.
“Over £385bn was spent on public procurement in 2022 to 2023, making up almost a third of all public spending,” said CLC in the foreword to its guidance. “The Procurement Act 2023 enables a new approach – simplifying structures and providing more flexibility to those designing procurements.
“A new National Procurement Policy Statement now sits alongside it, setting out the new administration’s national strategic priorities, and acting as a North Star for contracting authorities.
“A system designed and developed in the UK, to meet our nation’s needs, is a great leap forward. For the reforms to truly succeed though, culture and behaviour will have to change too.”
