How is the Procurement Act going to drive social value

The regulations laid out within the Procurement Act 2023 will go live today with the aim of creating a more simple, flexible and transparent commercial system.

The move from MEAT (Most Economically Advantageous Tender) to MAT (Most Advantageous Tender) is set to benefit both suppliers and procurers in relation to social value efforts. Will Campbell, social value engagement lead at Loop, summarises the changes and how to prepare for the new regime.

Procurement is complex. While changes within the Procurement Act 2023 aim to simplify the procurement regulatory framework and the conduct of procurement procedures, the way in which key procurement law concepts and principles have been reformulated are likely to render the new legal framework different but not necessarily less complex.

That said, one of the opportunities is for everyone involved in procurement to fully embrace social value and make it central in the creation of positive outcomes. This includes well-recognised national suppliers through to SMEs – which will be competing for and winning more contracts when public procurement is opened up to new entrants. On the flip side, the Procurement Act will also mean tougher action is taken on underperforming suppliers, so it’s time to get onboard.

MEAT to MAT

The move from MEAT to MAT most obviously removes the ‘E’ – standing for ‘economically’ and its removal represents a move from lowest cost to best value. More subtly, it is going to create a heightened focus on leveraging procurement as a facilitator for delivering broader social and environmental impacts. Meanwhile, contracting authorities are going to be given more autonomy and choice when assessing tenders, and suppliers will be provided with more opportunities to operate in the public sector because price is not the only determining factor in awarding contracts.

There is the possibility that criteria will be set solely aimed at non-price or quality elements such as creating local employment opportunities, reducing carbon emissions or using a local supply chain – all of which naturally fall under the umbrella of social value and also link to the National Procurement Policy Statement’s (NPPS) latest social value national outcomes.

Maximising public benefit will remain a key driver in any procurement future reform, but the less prescriptive nature of MAT will immediately create several key opportunities. These include utilising the transparency agenda throughout the procurement lifecycle, greater flexibility and accountability, and considering proportionality to avoid inadvertently creating barriers.

This all being said, the omission of any direct reference to social value within the Procurement Act is surprising, but the focus on maximising public benefit encompasses considerations of social value in a broader sense. The accompanying National Procurement Policy Statement does set out some national outcomes that should be taken into account with regard to social value, giving flexibility to contracting authorities in how they implement them. The Procurement Act will mean moving away from European Union language and terminology, so there will be new concepts as well as some familiar ones, which are simply worded differently.

As with all of the wider flexibility contained within the Procurement Act, social value success will depend upon the provision of clear policy, guidance and training, as well an open-minded attitude towards change.

Preparing for change

We are leaving an era in which price is the only real concern, moving into a time when keeping social value at the top of the agenda will be essential to procurement success. To prepare for this, upskilling and a commitment to learning needs to be embraced. This may form part of a significant cultural or behavioural change for some.

Whether it’s social value training, tender support, social value strategy advice or attending a workshop, there are various ways for professionals to prepare for change. You may understand the changes and be able to talk the talk, but walking the walk will verify your alignment with procurement aims.

The public sector must also consider its own activity and how this can adapt to ensure the best outcomes. One option is designing an implementation plan and structure that considers resources, policies, procedures, training and data. Another consideration is avoiding current processes by encouraging different ways of working. If there is a procurement pipeline, think about how this may be impacted and where the new regulations could be beneficial.

Social value measurement platforms can also support with meeting the MAT agenda as they provide the most effective way to capture and report social value, while also contributing to continuous evaluation and improvement.

Additional time may be needed for procurements in the near future while the changes are still new, but this will be the same for everyone. It’s important to remember this is a long-term change, so being pragmatic is being realistic.

For more information, please visit https://www.loop.org.uk/

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