What does the Procurement Act mean for practitioners and for measurement?

co-authored by Andrew van Doorn OBE, Chief Executive of HACT

With the introduction of the new Procurement Act it’s time to focus on Social Value and prioritise what matters most.

The long-awaited Procurement Act 2023 is officially live. There has been plenty of focus summarising the changes to procurement and updating the Social Value Model (previously PPN 06/20) through the accompanying PPNs - PPN 002 in particular.

From a practitioner perspective, the main question is: what is revealed through the Act? What is the Government telling us?

All of the changes - in language, in emphasis, and in alignment to the six Government Missions - signal a critical opportunity to focus on performance, delivery and impact. Our understanding of social value has matured significantly since the publication of the Social Value Act in 2012. We can and should openly acknowledge that procurement is merely a process - a mechanism to articulate and secure social value commitments. Procurement does not itself deliver social value, it secures a commitment and requires in-scope organisations to consider how what is being procured may improve social, environmental and economic wellbeing (PPN 003).

The Procurement Act and its associated PPNs therefore offer a moment to pause, reflect, and ensure our behaviours are guided by the ultimate goal: driving and evidencing value. So, how can we use this moment to best effect? By focusing on three key areas.

 Firstly: focus on change. 

The end goal is to drive positive change - not to secure a tender. Driving change should be an authentic exercise, as people and communities are the ultimate beneficiaries of public spending. These communities need to experience the positive impact that should be affected through policy change. Done well, it’s in the delivery of social value commitments where we see change. This requires us to move away from a position of forecasting (and generating a big number to attach to our promises) to accountability for the delivery of those commitments. Focusing on change - and how to evidence it - is vital.

 Secondly, focus on missions.

The revised Social Value Model is simplified, and it’s also directly linked to the Government’s Missions. This alignment is explicitly telling us to focus squarely on how our purchasing power can drive economic stability, enable growth, enable access to opportunities, create safer neighbourhoods, improve our health service, and deliver energy security. Both for government departments and for non-governmental bodies, the message is clear: to be critical about how our spending - as well as where, what and for whom - will deliver against these missions and to focus on what matters most.

Thirdly, focus on local impact. 

Large programmes might be focused over large areas, but a one-size-fits-all approach doesn’t work. It’s often where the ‘value’ in ‘social value’ gets lost. This may require a more thoughtful and intentional approach to procurement, as well as a more deliberate approach to our supply chains. It’s also where SMEs, micro SMEs and the VCSE sectors comes into its own, with increased emphasis placed on publishing targets and reporting on them (PPN-001). 

To know what matters most and unlock the value in our local communities, we must invest more in pre-market engagement - which the Act itself emphasises. Pre-market engagement has always been crucial, but is arguably even more so now, as driving change in the right places, for the right people, at the right time, requires that we work with locally focused organisations.  These are the people and organisations already working in local (or even hyper-local) areas, with the intelligence, insights, and networks, to know what is required to make a difference. 

What next?

There is always so much to do, and the new Procurement Act comes at a time when our public services are stretched, and our communities are under significant stress. Driving the social value agenda forward will require bold new creative approaches, with a steadfast commitment to impact, and above all, focus.  A focus on what matters the most. A focus on delivery. A focus on what truly improves wellbeing. A focus on impact.

Within this we also need to focus on how we measure our impact.  In order to be authentic, we need to know what is being committed to alongside an assurance that it is actually being delivered. 

Although the Act is relatively silent on the specifics of measurement (what frameworks or tools can be used), there is a clear mandate to focus on performance and on KPIs to evidence how change is delivered. The UK Social Value Bank remains a robust and Green Book compliant way to measure change. Wellbeing is strongly correlated to critical outcomes like health, educational attainment, sense of safety and community, and even life expectancy. That’s why we focus on valuing impact and measuring change through the lens of wellbeing: using a strong evidence base to reflect how people and communities experience change. 

Planning for and measuring our impact, and being accountable for the change we create, goes to the core of an authentic mission-based approach to social value. By being focused on what matters most, and using every pound to improve wellbeing, social value can be truly transformative. That is what we should be focusing on, now more than ever.