Delivering social value? How PPN06/20 is and isn’t - changing our sector

In January 2021, the UK government’s Public Procurement Note 06/20 came into force, and social value leapt up the agenda.

In the two years since, there’s been real progress - yet we’re still seeing a misunderstanding of what social value is, what it means for business models, and real challenges around its measurement, reporting and standardisation. That’s why representatives of leading companies in our industry have come together to form a collaborative Professional Services Social Value Forum, exploring the challenges around social value delivery, its regulation, and what we can do about it.

At last, social value is being taken more seriously. Since coming into force in January 2021, the Government’s Public Procurement Note 06/20 (PPN06/20) mandates that social value ‘should be explicitly evaluated in all central government procurement’. Where the Public Services (Social Value) Act 2012 only legislated that social value be just ‘considered’, PPN06/20 means that all bids for public sector contracts must include proposals for propagating social value. It’s helping public sector contractors to think more deeply about how their bids and schemes impact local communities and the country at large. 

PPN06/20 is pushing social value higher up the agenda. However, two years after coming into force, it’s clear that social value is still underplayed and misunderstood. On its own, it won’t enable the industry-wide transformation we need to really deliver optimal social outcomes.

PPN06/20: The good, the bad, and the limited

PPN06/20 has been instrumental in energising positive change. By mandating a proportion of weighting to social value, it ensures the important step of considering social value at the procurement stage, for every single contract. In turn, this challenges our industry to think more deeply - and earlier on - about how any given project actually enhances the lives of local people. These improvements ripple across the supply chain, influencing thinking on social value from the smallest companies upward.

But PPN06/20 deals only with procurement. Instead of focusing on outcomes or processes, PPN06/20 only targets how bids for public sector tenders are evaluated. It challenges bidders to show how they will add social value, but further guidance and/or regulation is likely required to enable accountability and enforcement. With varying levels of client maturity, it can still be all too easy for firms to promise more than they deliver, not intentionally but by failing to provide a framework for how the proposed impact will actually be followed through all the way to delivery.

Moreover, even when a bidder has a solid framework for how to deliver its proposed social value, their effectiveness is limited by PPN06/20’s generic questions, which are applied to public sector contractors across all shapes, sizes, and industries. A firm bidding for a £5bn project will be asked the same questions as another bidding for an £50k contract.

Proportionality needs to influence PPN0620’s questions, and, if we really want to optimise long-term outcomes, regulatory queries must eventually become less generic and more relevant, nuanced, and targeted. That way, the whole sector will be encouraged to develop proposals with a better chance of maximising social value from infrastructure delivery and management.

However delivering transformative social value requires more than regulations – it requires industry leadership. In 2021, leading engineering firms came together to establish a social value forum, comprising professional services organisations from across the built environment sector. 

This forum regularly meets to share, discuss, and identify ways to overcome obstacles and maximise our industry’s positive impact. In a world where both legislation and scrutiny are growing, it’s more important than ever that we come together to proactively develop and share best practice.

Opportunities for change

There are a number of barriers to delivering impact within our sector. First, social value is still too siloed. To mitigate negative impacts and maximise positive ones, we need a ‘leftward shift’: moving social value considerations to the very start of a project’s conception, and enabling greater collaboration between clients and suppliers. Only by considering social value at the very beginning of a scheme can we hope to identify and deliver optimal outcomes. This requires elevating social value from a ‘nice-to-have’ to a business-critical essential. 

Second, how can we increase capacity? Across our Professional Services Social Value Forum, we hear the same problem echoing throughout our sector: we don’t have enough capacity. Even though most firms are beginning to grasp the urgency of social value, they don’t have the in-house capabilities to give it the attention it deserves. And PPN06/20’s introduction has exacerbated this lack of capacity, causing firms to outsource expertise and pushing up demand higher still. 

We need to upskill our industry by sharing resources and best practice wherever possible, while attracting social value experts from other industries (like international development and the third sector) to help us confront these challenges together.

More importantly, standards must be raised. Not only do we have to get more ambitious about what we deliver, we must also become more rigorous in how we measure, evaluate, and report on it. PPN06/20 may not require this, but firms are nevertheless under increasing pressure to prove their impact. That means establishing monitoring, evaluation, and reporting mechanisms from the start, and then using the data to enrich subsequent social value proposals. As well as generating deeper insights about what actually works in practice, when established from the outset such mechanisms also serve to ensure that firms consider how they’ll actually go about delivering their proposals.

Social value, future-proof

While PPN06/20 is a step in the right direction, there’s still progress to be made. But to change long-held legacy attitudes, encourage collaborative behaviours, and incentivise long-term thinking, we can’t just wait for new legislation. We have to come together as a sector to make a difference, right now.

Compared to our sector’s potential, maturity is still relatively low. Rather than dampening enthusiasm, the scope for progress means a huge opportunity for firms to improve their impact on our communities, economies, and environment. In a rapidly changing climate, where work cultures are also shifting, the scope for progress is huge, presenting a big opportunity for firms to improve their impact on our communities, economies, and environment.

PPN06/20 means we’re finally taking social value seriously, but we need to do more to make it right, relevant, and proportionate for professional services. That’s exactly what we’re doing on the Proefessional Services Social Value Forum. 

If you’re using PPN06/20 in your procurement, consider…

• Keeping the questions at theme level to allow more flexibility of application to our sector.
• Incentivising supply chain collaboration around social value to avoid silos.
• Whether the use of restrictive social value frameworks is suitable for professional service contracts.
• Evaluating long term/corporate investment into social value alongside contract level commitment, especially on smaller value contracts.
• Whether encouraging new employment opportunities at contract level actually fits with the professional services operational model, given that professional services are very unlikely to hire new employees for one contract.

The Professional Services Social Value Forum membership:

Michelle Baker - Associate Director, Social Value Lead, Atkins

Peter Masonbrook - Head of Social Value, Faithful+Gould

Kieran Ronnie - Associate Director, Head of Social Value AECOM

Caron Dunlop - Technical Director, Social Value, Mott MacDonald

Michelle Levi - Social Value Lead, Manchester, Jacobs 

Nin Khoshaba - Social Value Lead, WSP

This article first appeared in Construction News in May 2023