If you have worked in procurement over the last thirty years, many of today’s reforms may feel familiar. The terminology has changed, but the principle remains – procurement should deliver value, not simply buy at the lowest price. From Sir John Egan’s Rethinking Construction in 1998 to the Procurement Act 2023 and now PPN 026, public procurement has steadily moved towards a broader definition of value.
From Egan to Social Value
Egan challenged the focus on lowest price and adversarial contracting, promoting collaboration, integrated supply chains, continuous improvement and whole-life value. Nearly thirty years later, these principles are embedded across procurement through the Most Advantageous Tender (MAT), early market engagement, flexible procurement, supplier collaboration and social value. The language has evolved, but the objective remains – use procurement to achieve better outcomes.
PPN 026: The Next Step
PPN 026 represents the next stage in social value procurement, with a stronger focus on good jobs and skills opportunities, including for people facing barriers to employment. Social value should be about more than counting outputs. Creating jobs tells us what happened; understanding who secured those jobs, the barriers they faced and what changed tells us the impact. The same applies to apprenticeships, training and work placements. Completing training is an output; gaining employment, increasing earnings or progressing within the labour market is an outcome.
From Outputs to Outcomes
Social value procurement has traditionally measured jobs, apprenticeships, training, volunteering, local spend and community investment. These remain important, but PPN 026 creates an opportunity to focus more strongly on additional impact. Applying principles such as deadweight, attribution, displacement and additionality helps identify the change that can reasonably be linked to an intervention, providing a more credible picture of the social value generated.
Procurement Should Start with Need
Social value should reflect the communities affected by the contract. Different areas face different challenges, from youth unemployment and economic inactivity to skills shortages and barriers to employment. A stronger approach starts by understanding local need, identifying who should benefit and aligning procurement commitments to those needs.
Delivering against identified local need can create greater social impact and social value by directing investment and opportunities to where they can make the greatest difference. PPN 026 provides an opportunity to make employment and skills commitments more targeted, rather than applying the same measures across every contract.
Procurement Act 2023
The Procurement Act 2023 supports this direction through the Most Advantageous Tender and greater flexibility in procurement design. This creates opportunities to engage with the market, establish realistic outcomes and determine how commitments will be monitored before contracts are awarded. Social value should not simply be another tender question. It should form part of procurement strategy, evaluation and contract delivery.
Contract Award Is Only the Beginning
A social value commitment only creates value when it is delivered. Effective contract management should track what was committed, what was delivered, the evidence provided, the outcomes achieved and the overall social impact created. This is particularly important where delivery extends through contractors and their supply chains. We are also seeing greater use of dialogue, negotiation and Best and Final Offers (BAFO). Used appropriately, these stages allow proposals to be refined and social value commitments to become clearer, more realistic and measurable before contract award. The challenge with PPN 026 is not simply securing employment and skills commitments but ensuring they translate into evidenced and measurable outcomes throughout the contract.
The Next Generation of Social Value
Social value measurement is continuing to evolve. The initial focus was on counting activities and outputs, followed by financial proxy values to monetise social value. The next generation needs to demonstrate what changed, who benefited and the impact created, providing a clearer understanding of value for money and whole-life value.
A Theory of Change connects investment and activity to outcomes and impact, while additionality helps establish how much of that change can genuinely be attributed to the intervention. This moves social value from reporting what was delivered to demonstrating the wider and longer-term value created.
Thirty Years of Change
From Egan and Best Value through to the Social Value Act, Procurement Act 2023 and PPN 026, procurement has continued to broaden its understanding of value. The journey has moved from lowest price to best value, and now to a more comprehensive understanding of value for money, considering price, quality and the wider social, economic and long-term outcomes created through public investment.
PPN 026 strengthens this direction by focusing procurement on good jobs, skills and opportunities that respond to local need, moving beyond what was delivered to demonstrate the difference made and the longer-term value created.
From Social Value to Measurable, Whole-Life Impact
Ultimately, public procurement should create lasting value beyond the immediate goods, works or services being purchased. PPN 026 provides an opportunity to achieve this by targeting procurement against identified need, managing commitments through delivery, measuring genuine outcomes and demonstrating whole-life value from public expenditure.
Compliance Chain’s Social Value Solutions support organisations from social value planning and procurement through to delivery, evidence, additionality, monetisation and impact reporting. With PPN 026 applying to in-scope central government procurements commencing from 1 January 2027, organisations should now consider how employment and skills outcomes are built into procurement and measured throughout contract delivery.
If you would like to find out more, click the link here to explore our Social Value Solutions or get in touch with our team today.
