Social value in construction: what it is, how it is scored and why commitments fail
Updated: Oct 30
By Roman Bazelchuk | NEC Accredited Project Manager | APMG Project Planning and Control
Founder, NEC Planning Solutions Ltd
Social value in construction is the wider economic, social and environmental benefit a contractor commits to deliver through a contract, scored in public procurement and monitored through delivery. Commitments usually fail because they sit beside the project rather than inside it. From January 2027, PPN 026 narrows central government scoring to jobs and skills.
For a contractor, social value starts as a scored question in the tender and becomes an obligation once the contract is signed, monitored through delivery and often tied to a key performance indicator. The rules behind it changed when the Procurement Act 2023 came into force on 24 February 2025, and they change again for central government on 1 January 2027, when PPN 026 replaces the social value model buyers use today.
This guide covers what social value in construction means, the law and policy behind it, how it is scored, why commitments fail, and how jobs and skills commitments are delivered and evidenced once the contract is live. It is written for bid directors, social value leads and commercial directors, from the delivery side: what a commitment needs after the tender has been won.
Two related guides go further on narrower questions. The guide to PPN 026 sets out what the new model changes and what a commitment has to survive, and how to score higher on social value in construction tenders covers the written answer an evaluator marks.
What is social value in construction?
Social value in construction is what a community gets from a contract beyond the asset itself. It covers jobs and training for local people, fair pay and working conditions for the people who build the asset, spend with local firms and benefits to the area around the site. It is promised at tender, written into the contract and delivered on site.
Its legal root is the Public Services (Social Value) Act 2012, which applies mainly in England. Before it procures services, a public authority must consider how what it buys might improve the economic, social and environmental well-being of the relevant area, and how, in conducting the procurement, it might act to secure that improvement. The duty applies to services contracts. Central government has gone further for its own procurements, construction works included: on above-threshold contracts, where social value is relevant and proportionate, it must be scored with a minimum weighting under a published model.
For a contractor the working definition is narrower. Social value is what the buyer has chosen to score, and then what the contract holds the contractor to. Central government buyers choose from the government's social value model. Many local authorities and housing bodies use the National TOMs framework, and some write their own. The table shows how common construction commitments fare under the central government model from 1 January 2027.
Commitment | Example on a construction project | Central government from 1 January 2027 (PPN 026) |
New jobs | Site and office roles filled by local people or people facing barriers to work, kept for the length of the works | Good Jobs, criterion 1a: create and/or retain high quality jobs |
Fair pay | Pay above the statutory national minimum wage for the contract workforce | Good Jobs, criterion 1c: fair pay |
Working conditions | Flexible working and a positive workplace culture on site | Good Jobs, criterion 1b: fair working conditions |
Training | Accredited training or retraining in skills the sector lacks, including for people facing barriers to work | Skills, criterion 2a: training and retraining |
Progression | Operatives and supervisors moving up a grade during the contract | Skills, criterion 2b: in-work progression |
Apprenticeships and placements | Apprentices and work placements tied to the packages on site | Skills, criterion 2c: talent pipeline, or 2a: training and retraining |
Local supply chain | Spend with local small firms and social enterprises | No criterion in the model; many local authorities still ask for it |
Environment | Carbon, waste and biodiversity commitments | No criterion in the model; may be asked for elsewhere in the tender |
Community | Donations, community days and school visits | Scores only where it delivers the jobs or skills outcome the buyer has selected |
Social value policy in construction: the Act, the NPPS and the two models
The Procurement Act 2023 came into force on 24 February 2025, together with the National Procurement Policy Statement, which contracting authorities must have regard to, with limited exceptions. The statement asks authorities to deliver social and economic value that supports the government's missions. It points to high quality jobs, safe and healthy working conditions, fair pay and progression, and to more spend with small firms and voluntary organisations to boost local economies and jobs. Its wider effect on construction bids is covered in what UK contractors are really scored on in NEC tender bids.
Central government applies the statement through procurement policy notes. PPN 002 applies to central government departments, their executive agencies and non-departmental public bodies, on covered procurements commenced from 1 October 2025 where social value is relevant to the contract and proportionate. It sets a minimum 10 per cent weighting and a model of eight outcomes under five missions, including fair work, employment and training for people facing barriers, and sustainable procurement.
PPN 026, published on 5 August 2026, replaces it for covered procurements commenced on or after 1 January 2027 and valued at £1 million or more including VAT, and buyers are encouraged to move to it early. The minimum weighting is 10 per cent of the total score below £5 million and 20 per cent from £5 million. For construction works the 20 per cent band is the one that applies: a works contract is a covered procurement only from £5,193,000 including VAT, so every works procurement under PPN 026 carries at least 20 per cent. The 10 per cent band reaches services such as design and consultancy.
The new model has two outcomes, Good Jobs and Skills, with six award criteria between them, and the buyer selects the relevant outcome for each procurement. Award criteria must relate to the subject matter of the contract. Buyers will also be able to attach community programmes from a list due with the PPN's guidance in autumn 2026, and a commitment to support one is monitored by a KPI.
Local authorities, NHS trusts and integrated care boards are not bound by either note, although they may follow the approach. NHS procurements have carried a minimum 10 per cent net zero and social value weighting since April 2022, and many local authorities use the National TOMs to set and report measures. The 2012 Act still applies to their services contracts. A contractor bidding across sectors can therefore meet three regimes in one year: PPN 002 on central government work already in procurement, PPN 026 on new central government work, and a local or NHS framework everywhere else.
How social value is scored in construction tenders
The buyer publishes the outcome it has chosen and the award criteria, and asks bidders for a written response. Bidders commit to specific actions: how many roles, for whom, for how long, with what training, reported how. Evaluators mark the response against the published criteria, on the scale and weighting the tender documents set out, and the commitments then become contract terms.
Scoring is qualitative first. An evaluator is judging whether a commitment is specific, relevant to the contract and deliverable, and whether its evidence route is credible. The numbers still matter, because they become the KPIs the contractor is measured against, and frameworks such as the National TOMs attach a measure to each commitment so that it can be reported. Some local buyers also score the quantity offered.
The written answer is where points are won and lost, and how to score higher on social value in construction tenders covers how to write it. The weighting explains why it deserves the same attention as the programme and the price.
COMMERCIAL CONSEQUENCE Under PPN 026, social value carries at least 20 per cent of the total score on contracts of £5 million or more. Losing a quarter of those marks costs 5 points. Under a pro rata price formula weighted at 40 per cent, 5 points is the gap between the lowest price and one about 14 per cent higher. |
Why social value commitments fail
Commitments fall into two broad kinds. Decorative commitments sit alongside the project: charity donations, community days, volunteering and one-off visits. Structural commitments sit inside it: roles in the delivery team, apprenticeships on the packages being built, training that ends in a qualification. Figure 1 shows both on one programme. The decorative kind leaves behind an event; the structural kind is still running when the buyer assesses the KPIs.
Decorative social value is not wrong. It belongs in a contractor's community relations, and it can build goodwill around a site. It is not what central government scoring rewards, and from 2027 it scores there only where it delivers the jobs or skills outcome the buyer has selected, although local frameworks such as the National TOMs can still count donations and volunteering. Four failures recur in the commitments that lose points at tender or fall apart in delivery.
They sit beside the project, not inside it
Award criteria must relate to the subject matter of the contract. A donation to a local charity, however welcome, does not change who builds the project or what they learn while building it. A commitment the work itself delivers, such as roles on the packages being built filled from the target group, is tied to the contract by its nature.
They promise outputs, not outcomes
Hours volunteered, events held and pounds donated are outputs. People employed, qualifications achieved and pay raised are outcomes. The model is built around outcomes, and an evaluator can only score what the contract will show being achieved and measured.
They fail the additionality test
The Treasury's Green Book defines additionality as the outcomes that take place as a result of an intervention, and deadweight as the outcomes that would have happened without it. A commitment that relabels existing staff as new hires, or counts training the workforce would have had anyway, is deadweight, and an evaluator who knows the sector will mark it that way. Count only what the contract causes, and say how it will be counted.
Nobody owns the evidence
The bid team writes the commitment, the bid is won and the commitment goes into an appendix. Mobilisation is busy. Twelve months later the first KPI assessment arrives, and nobody has kept the records that prove anything happened. The commitment may well have been delivered; the evidence was never planned.
How jobs and skills commitments get delivered
The commitments that score from 2027 are about people: who is hired, how they are paid and treated, and what they learn. On a construction project that means working through the delivery team and the supply chain, because much of the site workforce is employed by subcontractors rather than by the main contractor.
Real roles in the delivery team
The roles come from the resource plan, not from a separate social value budget. Each one belongs to a package and a period of the programme: a groundworks operative from the start of the substructure, a trainee in the site team from mobilisation, an apprentice electrician when the M&E package starts. A role with a start date, a supervisor and a place in the programme gets filled. A role described only as "opportunities for local people" usually does not.
A recruitment route that reaches the target group
Commitments to people facing barriers to work need a route to those people. That usually means a partner: a jobcentre, a local employment and skills programme, a college or training provider, or an organisation that works with care leavers, veterans or prison leavers. The partner, the target group and the local area should be agreed with the client before the commitment is priced, because they decide what can actually be delivered.
Training that ends in something recognised
Training scores when it leads somewhere: an apprenticeship, a recognised qualification or a step up in grade. A short course that ends in an attendance list is an output. Under PPN 026, training and retraining, in-work progression and the talent pipeline are separate criteria, so each commitment should say which one it serves.
Subcontracts that carry the commitment
Where much of the workforce is employed by subcontractors, the commitment has to be written into the subcontracts, with the same reporting the main contract asks for. A main contractor that commits to fair pay or new local jobs and leaves its supply chain out of the reporting has committed to something it cannot evidence.
NEC Planning Solutions helps contractors turn jobs and skills commitments into delivery: the roles built into the programme, the evidence plan, and the reporting each KPI assessment will ask for. See how social value support for bid teams works.
Social value in construction projects: design, build and handover
Social value is often treated as a bid-stage task followed by a delivery-stage report. It works better as a thread through the whole project.
Design and pre-construction
Agree the target group, the local area and the counting rules with the client while the design is still moving, and plan the roles into the programme and the resource plan alongside the packages they belong to. On a two-stage tender, the pre-construction period is the time to line up the recruitment and training partners, so that the first starts follow the first packages rather than months later.
Construction
Deliver the roles, the training and the apprenticeships on the dates the programme gives them, and collect the evidence as the work happens: starters, leavers, pay rates, training records and subcontractor returns. Report them in the same monthly cycle as progress, not in a separate return at the end of the year.
Handover
Plan where the people go next: onto the contractor's next project, into the supply chain or into the operator's team. Close the evidence with a final record against each KPI, and keep it. A delivered, evidenced commitment is the strongest thing a contractor can cite in its next bid.
Evidencing social value: KPIs, records and the 12-month assessment
Under the Procurement Act 2023, a public contract with an estimated value of more than £5 million carries at least three key performance indicators, unless the buyer considers that performance cannot appropriately be assessed that way; frameworks and some other contract types are excluded (section 52). The buyer assesses performance against them, and publishes the assessment, at least once every 12 months and on termination (section 71). From 2027, PPN 026 asks for at least one social value KPI on top of those on contracts of £5 million or more, and for every social value commitment to be monitored through the contract.
Each commitment needs a record that proves it, chosen before the bid goes in. New jobs are proved by contracts of employment, start dates and payroll, with home postcodes where the buyer counts local hires. Fair pay is proved by the pay rate for each grade, including the supply chain's. Training and apprenticeships are proved by enrolment, progress and achievement records, and progression by changes of grade. The counting rules matter as much as the records: what counts as local, whether a role counts as a full-time equivalent, and how long someone must stay before the role counts.
PLANNER'S TAKEAWAY Load each jobs and skills commitment into the programme: recruitment, start dates, training milestones and each KPI assessment, linked to the packages the roles belong to. Progress reporting then produces the evidence month by month, and a package that slips shows up as a social value risk before the 12-month assessment does. |
The author's view
I treat a social value commitment as scope. It needs what any other scope needs: a resource, a start date tied to the work it belongs to, an owner and a record that proves it was done. Most commitments that fail never had those four things. They were written by the bid team, priced as marketing and forgotten at mobilisation.
My position is that the planner should hold them. The programme already knows when the frame starts, when the M&E package mobilises and when the site moves to commissioning, which is when the roles, the training and the apprenticeships can begin. A commitment that sits in the programme gets progressed every month. One that sits in an appendix gets remembered at the first KPI assessment, usually too late to recover.
PPN 026 makes this sharper rather than harder. Narrowing central government scoring to jobs and skills removes the easy points and leaves the commitments that change how a project is staffed. For contractors that already treat people as delivery capacity, that is an advantage.
Summary
Social value in construction is the benefit a contractor commits to deliver through a contract: jobs, fair work, training and the wider good of the area, scored at tender and monitored through delivery. Its legal root is the Public Services (Social Value) Act 2012. Central government scores it under the social value model: PPN 002, with a minimum 10 per cent weighting, on procurements commenced before 1 January 2027, and PPN 026 from that date, with minimums of 10 per cent from £1 million and 20 per cent from £5 million, the band every works contract under it falls into. Local authorities and NHS trusts are not bound by either note; NHS procurements carry their own minimum weighting, and many local authorities use the National TOMs.
Commitments usually fail because they sit beside the project, count outputs rather than outcomes, fail the additionality test or have no owner for the evidence. The ones that score are delivered by the project itself: real roles in the delivery team, a recruitment route to the target group, training that ends in something recognised and subcontracts that carry the commitment, each with a record chosen before the bid goes in and, on contracts above £5 million, KPIs assessed at least every 12 months.
Social value in construction: frequently asked questions
What is social value in construction?
Social value in construction is the wider benefit a contractor commits to deliver through a contract, such as jobs and training for local people, on top of the works. Public buyers score it at tender and monitor it through delivery. From January 2027, PPN 026 limits central government scoring to jobs and skills, with minimum weightings of 10 per cent from £1 million and 20 per cent from £5 million.
What social value commitments do contractors typically make in bids?
Most bids offer apprenticeships, local labour targets, spend with local suppliers and small firms, community events, volunteering days and charity donations. From 1 January 2027, central government buyers score only jobs and skills under PPN 026, so community and charity items score there only where they deliver that outcome; the National TOMs can still count them. Commitments that score name the roles, the group, the target and the evidence.
Which social value frameworks are used in UK construction procurement?
Central government buyers use the government's social value model: PPN 002 for procurements commenced before 1 January 2027, then PPN 026, which scores only Good Jobs and Skills. NHS procurements carry a minimum 10 per cent net zero and social value weighting. Many local authorities use the National TOMs, a framework of themes, outcomes and measures. Underneath them, the Public Services (Social Value) Act 2012 applies to public services contracts.
What does additionality mean in a construction social value commitment?
Additionality means counting only the benefit the contract causes. The Treasury's Green Book defines it as the outcomes that take place as a result of an intervention; outcomes that would have happened anyway are deadweight. Relabelling existing staff as new hires, or counting training the workforce would have had anyway, is deadweight. A strong commitment says how it will count new jobs and training, and what it will leave out.
How is local employment counted as social value on a build project?
The buyer usually defines local, often as a postcode area or a distance from the site, and the contract sets the counting rules: new hires or retained staff, full-time equivalents and a minimum period of employment. The evidence is employment records with start dates and home postcodes, including the subcontractors' workforce where the contract asks for it. Agree those rules before the commitment is priced.
How should social value be handled across design, build and handover?
At design and pre-construction, agree the target group, the local area and the counting rules with the client, and plan the roles into the programme alongside the packages they belong to. During construction, deliver them and record the evidence in the same monthly cycle as progress. At handover, move people on to their next role, close the evidence against each KPI and keep it for future bids.
What is the difference between decorative and structural social value?
Decorative social value sits alongside the project: donations, community days, volunteering and one-off events. Structural social value sits inside it: roles in the delivery team, apprenticeships on the packages being built, training that ends in a qualification. Structural commitments produce outcomes the buyer can monitor, which is why they score. From 2027, decorative ones score on central government work only where they deliver the selected jobs or skills outcome.
About the author
Roman Bazelchuk is the Founder of NEC Planning Solutions Ltd, a UK project planning and controls consultancy supporting contractors with NEC programme compliance, compensation event assessments and live project controls. He is an NEC Accredited Project Manager and holds the APMG Project Planning and Control qualification, with a BEng in Mechanical Engineering and postgraduate training in Planning and Control.
NEC Planning Solutions provides contract-aware planning support through a QA-governed delivery model, helping project teams keep programmes accepted, current and commercially useful from tender through to live delivery.
Arrange a consultation
Lost points on social value at your last debrief? We will show what a commitment that holds up looks like on the next bid. The first consultation is 30 minutes with Roman Bazelchuk, Director, confidential, with no documents needed in advance. Email info@necplanningsolutions.co.uk or call 0330 223 7709. Our social value offer for bid teams is set out here.
