As public spending is being redefined through the lens of social value, new rules are creating fertile ground for partnerships between companies and charities built on genuine shared purpose, not just compliance.
A Quiet Revolution
In February 2025, one of the biggest shifts in UK public procurement for decades quietly came into effect. The Procurement Act (2023) may sound like dry legislation, but its implications are anything but. It will transform how public money is spent and, crucially, how charities and social enterprises can work strategically with business to deliver impact in communities.
For the first time, any organisation with more than 20 employees that supplies goods or services to national or local government – whether directly or through a supply chain – must demonstrate measurable social value and wellbeing outcomes in the communities where they operate.
That includes many charities and social enterprises themselves, as well as the private companies they partner with. The change is seismic, yet it has flown largely under the radar for much of the social sector. Many frontline organisations don’t yet realise how profoundly the Act could alter the funding and partnership landscape over the next few years.
From Cost and Efficiency to Purpose and Impact
The UK public sector spent around £434 billion on procurement in 2024/25. For years, value for money and efficiency ruled every decision. Now, under the new Act, social purpose has entered the equation and it’s changing how public spending works.
Under the new framework, social value, or what an organisation gives back to the community, will carry significant weight in every contract decision. Public commissioners are now legally required to evaluate social value and wellbeing in all bids, with marks typically distributed across wellbeing outcomes (50%); community impact (25%); and environmental sustainability (25%).
In short, the days when price alone decided who won a public contract are over. Successful bids must now show how they contribute to stronger communities, fairer jobs, healthier workplaces, and more sustainable local economies.
This Matters to Charities
For charities and social enterprises, the Act represents a significant shift and a real opportunity. The new framework rewards purpose, added value and measurable impact beyond contract delivery – all qualities that the social sector excels at.
Local providers will be favoured for local solutions. Lived experience, trust and reach – the sector’s intangible strengths – are now recognised. The challenge for social sector organisations is one of communication – while many already deliver the kind of outcomes the Act seeks (improving wellbeing, supporting and upskilling communities, creating jobs, etc), they fail to measure or articulate that value in a way that reflects the new requirements. Most charities already do what the Act demands, and their task now is to show it.
Over time, this new emphasis will ripple far beyond government contracts. Funders, sponsors and other types of partners are likely to align their expectations with the government’s social value framework, embedding these measures as standard practice across the economy.
A New Dynamic with Business
Private companies – including those supplying indirectly through larger contracts – must now evidence how they generate positive social and environmental outcomes in the locations where they operate. Most can’t do that alone, especially the small and medium-sized businesses (SME’s) that lack the networks or expertise to deliver social value directly. These organisations will need credible, values-aligned partners who can help them deliver and evidence real impact on the ground.
According to Victoria Jones, Vice‑President, Equality, Diversity and Inclusion, AtkinsRéalis, “The new Procurement Act marks a fundamental shift from transactional compliance to purposeful partnership for large corporates. No longer is it enough to simply deliver on cost and efficiency; we are now called to demonstrate measurable social value and wellbeing outcomes in every community we touch.
This legislation challenges us to rethink our supply chains, deepen our collaborations with charities and SMEs, and ensure that our impact is both inclusive and far-reaching. By embracing this new standard, large organisations have a unique opportunity to lead by example—embedding social value into our core strategies and ensuring that the benefits of public spending reach those who need it most.”
That creates major opportunity for the social sector. Corporates simply can’t deliver these outcomes alone – they need the relationships, reach and lived experience that charities bring.
This is a moment for charities to come forward as strategic partners – shaping how suppliers can better support communities and ensure that the benefits of public spending reach the people and places that need them most.
If impact is to be genuinely inclusive and far-reaching, deepening collaboration between charities and SMEs becomes mission critical. Those organisations (larger charities and social enterprises included) who embrace the new standards early have a unique opportunity to lead by example and embed social value within core business strategy.
That’s where the not-for-profit sector comes in. Through a strategic approach to partnership charities can be the bridge between corporate objectives and community outcomes. Businesses, in turn, can meet their legal and reputational obligations while investing in relationships that strengthen local economies and community trust.
This marks the beginning of a new phase of cross-sector collaboration, where social impact isn’t a tick-box exercise but a shared strategic goal.
Defining Social Value
The term can sound abstract, but the Act provides a clear framework built around four pillars:
- Social – Building stronger, more connected communities
- Economic – Creating jobs, skills, and local growth
- Environmental – Supporting sustainability and responsible practice
- Wellbeing – Improving health, inclusion, and happiness.
Most charities can map their work across these four areas with ease. The challenge lies in defining, measuring, and communicating that impact in a way that aligns with how commissioners and corporate partners must now report it.
This will mean adopting new language and tools to better measure impact and social return on investment. The organisations that do this early will be in the strongest position to exploit partnership opportunities and influence how businesses invest in social value locally.
Becoming ‘Social Value Ready’
More charities are now seeking specialist guidance to translate their impact into the language of the Procurement Act and to strengthen their readiness for equitable, outcomes-focused partnerships.
For non-profits, being social value ready is as much about structure and practical steps as telling the right story by:
- Assessing impact – Auditing current activity against the four social value pillars. Many charities already achieve far more than they record.
- Sharpening the story: Defining how their work contributes to wellbeing, sustainability, and economic participation.
- Strengthening the data: Collecting tangible evidence and outcomes that demonstrate local impact.
- Creating partnership packages: Developing clear, tailored offers that make it easy for individual businesses to collaborate and invest.
- Engaging the right partners: Identifying businesses in their area that align with the mission and could benefit from their expertise.
By doing this groundwork, charities can position themselves not as grant recipients or subcontractors, but as strategic partners – helping businesses achieve their social value objectives while advancing their own mission.
Opportunity Behind the Obligation
For many businesses, especially small and medium-sized local suppliers, the new requirements may feel like another layer of red tape. But for charities and social enterprises, the Act is an open invitation to collaborate with corporates and to rebalance relationships that have too often been transactional and lacking in reciprocity.
Instead of waiting for corporate donations and short-term sponsorship, charities can now enter conversations because they provide something essential: community credibility, delivery capacity, measurable social outcomes and a ready-made platform for delivering social value.
The shift moves corporate engagement from philanthropy to partnership – from doing good on the sidelines to embedding social impact into strategy and operations. Charity-business partnerships done well will help to:
- Improve local employment and skills
- Strengthen community resilience
- Reduce inequality and exclusion
- Enhance sustainability and wellbeing outcomes.
From Policy to Practice
For all its potential, implementation will take time. Local authorities, public bodies and suppliers are still adapting to the new system, and approaches will vary regionally.
Some councils are already updating procurement policies and scorecards to reflect the Act’s priorities. Others are seeking guidance on how to evaluate social value consistently. In this transition period, charities have a window of opportunity to shape how the framework is applied in their local area and toy offer models of best practice and demonstrate the real-world outcomes that metrics alone can’t capture.
This is also a moment for collaborative infrastructure. Networks, local enterprise partnerships and intermediary bodies playing a key role in connecting businesses with community organisations and brokering partnerships that meet both compliance needs and local priorities.
Call for Strategic Partnership
Charities and social enterprises now sit at the intersection of government policy and business responsibility. They understand community need, deliver frontline impact, and hold a level of trust that neither public institutions nor corporates can easily replicate.
With that comes influence and the Procurement Act provides a rare chance for the social sector to define what good looks like, instead of just responding to others’ agendas.
Change of this scale can feel daunting, especially when resources are already stretched. But the organisations that start early – by clarifying their impact, building relationships with local employers, and embedding a social value narrative across their work – will be the ones shaping the next phase of community partnership.
Looking Ahead
The Procurement Act (2023) is more than a policy shift – it’s a catalyst for collaboration. It formalises what many have long argued: that economic value and social value should be considered hand-in-hand.
For business, it means embedding purpose in the supply chain; for government, it means measuring success by community outcomes as much as cost savings; and for charities, it means taking a seat at the table as equal partners in discussions around community benefit.
Now is the moment for charities and businesses to explore shared priorities and build the type of partnerships that will help drive real impact at the local level. Those who step forward early won’t just meet the requirements of the Act – they will shape what good looks like for community engagement.
Now is the moment for charities to position themselves at the forefront of this shift in the way government assesses value for money – shaping the opportunities for partnership and investment that will define social value over the next few years.
With the right support, charities that act early will be able to maximise mission impact and sustainability through the quality of partnerships they build with the corporate sector.
