Social value is not the problem – poor implementation is

A headline in The Times last month declared that forcing firms to show their social value is a “pointless pantomime”. The knee-jerk reaction from those working in social value was a chorus of dissent. Awkwardly, we actually agree with many of the key points underlying the Re:State report. 

There is an irony to the report and the press coverage that followed. The 66-page analysis devotes real effort to exploring how policy intent becomes distorted in scaled implementation, only for its own nuanced argument about complexity and proportionality to be flattened into a crude “ditch social value” headline.

A practitioner’s perspective

The practice-legislation gap in public procurement is real. Social value has simply become its most visible symptom. But social value is a symptom, not the disease.

The practice-legislation gap in public procurement is real. Social value has simply become its most visible symptom, but it is not the disease

The root causes lie in weak implementation capability, misaligned incentives, and a deeply risk-averse culture. And many of Re:State’s proposed fixes risk suffering from the same issues.

Re:State rightly asks how procurement can deliver greater public value. It exposes structural bias toward large incumbents, while questioning whether SMEs are always the answer for growth, innovation or community impact.

It also critiques a system that rewards process compliance over outcomes, asking whether SME-friendly procedures genuinely promote equity or just add friction.

The critique of performative compliance is fair. When social value carries a 10%+ weighting and criteria is selected without rigour or understanding across procurements, it’s no surprise that process can eclipse purpose.

The lack of consistent follow-up, verifying whether commitments are delivered and using this to inform future decision-making undermines credibility. Trust us when we say this frustrates practitioners as much as suppliers.

Re:State also revisits the problem of quantitative scoring, where larger suppliers could secure higher marks simply by promising to do more. But this misses a major policy evolution. PPN 002 now mandates purely qualitative appraisal, ensuring bids are assessed on the quality and relevance of social value proposals, not scale alone. Some bias towards measurable KPIs will persist, but this reform directly addresses earlier inequities. Ignoring it weakens the claim that social value in procurement cannot, with time, and iteration evolve into a fairer, outcome-led practice.

The report’s argument that it’s “incoherent” for SMEs to demonstrate how they use SMEs in their supply chains is similarly flawed. The SME category spans from sole traders to 250-person firms. Expecting a £40m larger SMEs to support smaller ones isn’t incoherent, it’s ecosystem building.

Complexity, capability, and the missing nuance

Re:State argues that contracts with inherently social purposes such as affordable homes, clean energy, safer streets shouldn’t carry additional social value criteria because it risks dilution of the contracts primary purpose. But that oversimplifies the issue. How do we compare social good across sectors? Is clean energy inherently more valuable than data security? Who decides?

This isn’t about exempting “social good” contracts. It’s about identifying if and where they can add value beyond their core purpose. A green energy contract already benefits society, but its public value multiplies if it also creates quality jobs, supports skills development, or boosts local economies. The report acknowledges nuance but misses the very nuance needed to optimise procurement for both inherent and additional value.

Social value hasn’t failed because the principle is wrong; it falters where mechanisms turn intent into box-ticking

The deeper problem is Goodhart’s Law: when a measure becomes a target, it ceases to be a good measure. Social value hasn’t failed because the principle is wrong; it falters where mechanisms turn intent into box-ticking. Across £400bn of annual public spend, that risk exists - but so does evidence of meaningful impact. The Ministry of Justice’s efforts to link prison construction to ex-offender employment, for example, align social value directly with departmental mission.

Lord Young’s 2017 review of the Social Value Act identified many of the same issues Re:State now flags: patchy application, measurement challenges, burdens on SMEs. But Young argued for improvement, not abandonment. Seven years later, we’re still debating implementation rather than purpose.

The judgment paradox

Re:State observes that officials are “misled about what they should do to secure best value for money,” yet many of its recommendations rely on the same judgment and discretion currently lacking.

If procurement teams struggle to apply proportional social value guidance, why assume they’ll handle “smart awards,” fee-at-risk models, or dynamic frameworks more effectively? Discretion without confidence produces paralysis, not innovation. And more discretion often means more consultancy input, more oversight layers, and ironically more risk aversion.

The framework reform presents an interesting dilemma. Re:State notes that frameworks have become captured - strategic suppliers win 48% of their work via frameworks versus 25% public sector average. Their solution: make frameworks continuously open and “dynamic.” This addresses one problem (periodic lock-in) but may create another. Large firms have dedicated bid teams, economies of scale in compliance, relationships with framework operators, and track record advantages. Continuous assessment may entrench these advantages through ongoing low-level bidding costs that only large firms can absorb. Both the status quo and alternatives have trade-offs worth examining.

Without addressing capability and culture, no procedural reform, however elegant, will succeed

Root causes nobody wants to face

Public procurement’s dysfunction is structural, not conceptual. Five interlocking realities drive poor outcomes:

1. Capability deficit – too few skilled commercial professionals for the spend they oversee.

2. Asymmetric risk – legal and compliance risk is visible; delivery risk is slow-burning. This creates rational conservatism. Proposals involving more discretion and direct awards need to address who provides political cover when things go wrong.

3. Misaligned incentives – compliance is rewarded, outcomes are not.

4. Resource imbalance – massive effort goes into award, little into contract management, where value is delivered.

5. Information asymmetry – suppliers often understand markets better than buyers.

Both current social value policy and Re:State’s proposals must operate within these constraints. Without addressing capability and culture, no procedural reform, however elegant, will succeed.

What actually needs to happen

Change should begin with three fundamentals: simplification, proportionality and capability. The current system’s complexity rewards form over substance.

Simplify by stripping out the noise: hygiene factors like legal compliance, payment terms and modern slavery should be baseline pass/fail, not scored. These are entry conditions, not differentiators.

A small local contract shouldn’t face the same social value scrutiny as a £100m framework

Be proportionate by focusing effort where it matters. A small local contract shouldn’t face the same social value scrutiny as a £100m framework. Tier assessments: light-touch for contracts under £5m; simplified for £5m–20m; full evaluation only for major or strategic procurements.

Build capability by ensuring buyers can articulate what social value outcomes they seek, why they matter, and how delivery will be verified, before they’re scored. In short: capability before complexity.

Finally, invest in people. The Government Commercial Function reportedly delivers £6.8bn in savings on a modest budget - a 6.5x return. That’s proof that commercial capability pays for itself. Without resourcing contract management properly, even the best-designed procurement processes leak value at delivery stage. Clever policy without capacity to execute it is just another form of inefficiency.

Implementation is the strategy

Re:State and practitioners probably agree on more than they differ. Any procurement model social value or otherwise fails without capability, accountability and realistic resourcing. Social value has become a case study in how good policy falters through weak delivery, but many of Re:State’s alternatives risk repeating the pattern.

The question isn’t whether social value is right in principle, it is whether we can design mechanisms that work within real-world constraints of skill, risk appetite and resource. Re:State’s scepticism is understandable. But removal isn’t reform.

The pantomime isn’t social value itself. It’s the persistent mismatch between ambition and capability. The challenge now is to decide whether to simplify what we ask of the system or finally build a system capable of delivering it.

Ellie Jenkins is a partner at Akerlof