On 24 September, Cabinet Office published PPN 06/20 “Taking account of social value in the award of central government contracts”, which launches a new model to deliver social value through government’s commercial activities.
PPN 06/20 applies to “In-Scope Organisations” (Central Government Departments, their Executive Agencies and Non Departmental Public Bodies). It applies to procurements covered by the Public Contracts Regulation 2015, is of immediate effect, and must be used for all new procurements from 1 January 2021.
PPN 06/20 requires that social value should be explicitly evaluated in all central government procurement, where the requirements are related and proportionate to the subject matter of the contract. This is a stricter obligation than that set out in the Public Services (Social Value) Act 2012, which refers to social value being “considered”.
Annex A of PPN 06/20 sets out a social value model. The social value model articulates the areas of priority focus for social value delivery in central government procurement, in the form of policy themes and outcomes. The policy themes are: Covid-19 recovery; tackling economic inequality; fighting climate change; equal opportunity; and wellbeing. Application of the model will be mandatory in central government, ensuring consistency by standardising the process for defining social value - although the PPN notes that commercial teams retain flexibility in deciding which outcomes should be applied to their particular procurement to ensure relevance and proportionality. Evaluation of the social value aspect of bids should be qualitative. The PPN also requires that a minimum weighting of 10% of the total score for social value should be applied to ensure that it carries a heavy enough score to be a differentiating factor in bid evaluation; a higher weighting can be applied if justified.
Detailed guidance on the application of the social value model will be published shortly.
Further, PPN 06/20 notes that procurements related to construction, capital investment and infrastructure projects above £10million should use the social value model priority themes and outcomes in applying the Balanced Scorecard for Growth (PPN 09/16). Guidance on this will be updated and we will let you know when this is published.