Understanding the National Procurement Policy Statement and its Impact
Social value is becoming increasingly recognised as an essential part of the work that companies do. Yesterday’s publication of the new National Procurement Policy Statement (NPPS) on social value marks a pivotal moment. Coming into force on February 24, the NPPS aims to embed social value into public sector procurement processes, ensuring that decisions made by public bodies reflect the wider societal benefits. It has been something that should be considered as part of public sector procurement since the Social Values Act of 2013, so is not a new aspiration. But what is exciting is that the new guidelines, have broadened the scope to be linked with the government’s Missions.
Could this indicate a deeper systemic shift in the way our economy works? Perhaps Labour’s modern answer to Clause IV, or Keir Starmer’s equivalent of the “Third Way”? Embedding social value into procurement could be seen as a means to bring about Labour’s traditional ideological ideals on redistribution, community involvement, and trade union recognition in a modern context. Instead of regulating enforcement, it appears the Government is instead looking to incentivise “good” practice through commercial logic. This crucial shift highlights a commitment to using public spending not just for economic efficiency but for the broader good of society.
What is the NPPS?
The National Procurement Policy Statement is a directive published by the Cabinet Office stating that public sector organisations must consider social value in their procurement activities. It is part of a broader movement towards responsible and sustainable procurement practices. The NPPS emphasises the need for public bodies to factor in the economic, environmental, and social benefits that can be derived from their spending decisions. This means looking beyond the immediate financial cost and considering how procurement can contribute to long-term societal goals.
The Core Objectives
The NPPS sets out several core objectives that public sector organisations are encouraged to achieve through their procurement activities:
- Economic Benefits: Supporting local businesses, creating jobs, and fostering entrepreneurship.
- Environmental Sustainability: Reducing carbon footprints, promoting sustainable practices, and protecting natural resources.
- Social Well-being: Enhancing community cohesion, improving health and well-being, and ensuring fair working conditions.
The NPPS sets out the social value priority areas that public bodies can choose to include in their criteria for granting public sector contracts. Whilst this has previously included things like skills development programmes, supply chain resilience and environmental programmes, the new statement now has significant sections on fair work practises as part of the Growth Mission, involvement of communities in the design of services, building community integration, supporting crime reduction and assisting the NHS Mission through increasing productivity through wellbeing.
Much of the agenda is driven by the experience of Georgia Gould, Parliamentary Secretary to the Cabinet Office, during her time as leader of Camden Council. Here she pioneered community engagement in the design of services to ensure they really meet the needs of users. When I was at Govia Thameslink Railway, we took a similar approach to timetable development, ensuring that passengers had genuine input into the development of the East and West Coastway timetables, which increased use and customer satisfaction at no extra cost. This kind of community engagement could count for at least 10% of the final score when granting public service contracts, meaning it can be the difference between winning or losing a contract. I saw this for myself while working on the successful bid by GTR’s owners to run the Elizabeth Line. Work done by GTR over many years provided a rich seam of content for the bid.
For companies looking to bid for public sector contracts, this is an opportunity to have a re-think of corporate social responsibility work to enable it to make a real difference. So many companies think of this work as either a tick box exercise, for reporting purposes or take a narrow focus, seeing it as ‘stuff that is good to do’ but not really a critical part of a company’s strategy. This government’s focus on and commitment to these issues means that it’s time to look at them and at social impact as a way to help solve some of the problems facing us as a society and to work as a partner with government.
I’m excited to use my 30 years of experience, working with politicians, communities and the private and public sectors to help grasp this opportunity. If you want to find out more, get in touch!
