New Values, New Landscape
Public contracts for social prosperity 2025 update
Author: Callin McLinden |
In October 2024 Localis launched New Values: Public Contracts for Social Prosperity with Norse Group. It is an in depth look into how local authorities can work towards strategic, locally beneficial procurement by adopting a blended approach and using hybrid models to deliver gains in efficiency, productivity and social value.
A year later much has changed in this evolving policy arena. Starting last December with publication of the English Devolution White Paper – and this July with the arrival of the long-awaited English Devolution and Community Empowerment Bill, and in light of the launch of a new consultation on public procurement from the Cabinet Office, we are looking back at New Values and assessing how the argument, narrative and recommendations have been impacted by the spate of reforms announced in the months since its release.
Key points
The changing context of strategic procurement
The first year of this Parliament has brought several legislative shifts impacting strategic local contracting, particularly the implementation of the Procurement Act in February 2025, which established a unified statutory framework and mandated social value as a statutory obligation. This framework intersects with two key parliamentary bills: the English Devolution & Community Empowerment Bill – which expands local autonomy and could enable social prosperity contracts to proliferate – and the Planning & Infrastructure Bill. While the Planning Bill has positive synergies, its measures to streamline and centralise certain decisions risk reducing opportunities for bespoke, locally negotiated social value commitments.
National policy presents both alignment and tensions regarding the ‘social prosperity’ ethos. The 2025 Spending Review (SR25) provides improved certainty through multi-year funding settlements, offering a stronger platform for long-term strategic procurement. Yet, the overall fiscal context, bounded by a cost-containment agenda and an emphasis on doing more with less, may exert pressure towards efficiency-driven commissioning and risk aversion, potentially dampening the desire for innovative local contracting. Similarly, while the 10 Year Infrastructure Strategy embraces social value, it risks recentralisation via the National Infrastructure and Service Transformation Authority (NISTA), which could constrain local flexibility. Furthermore, the Strategy’s narrow definition of social infrastructure risks sidelining vital community assets, such as libraries and green spaces, that underpin local wellbeing.
Looking ahead to further reforms
The report analyses proposed further reforms from the September 2025 Cabinet Office consultation on future reforms, which aim to further embed strategic procurement. Key proposals include requiring large contracting authorities to publish and report on three-year targets for SME/VCSE spend to enhance visibility and accountability; and introducing flexible tendering for people-focused services to allow commissioners to prioritise relational outcomes and continuity of care over rigid competition. While these proposals are in line with the approach to strategic procurement outlined in New Values and other Localis reports on the subject, the absolutely crucial caveat that must be added is the need for sufficient investment in local capacity.
The consultation suggests a public interest test for major contracts to decide between in-house or outsourced delivery. This test must be nuanced to support hybrid models and that the parallel proposal to standardise social value must allow for local customisation so that metrics remain relevant to place-based priorities. Building on New Values, Localis continues to champion innovative delivery models, recommending a strategic mix of insourcing and outsourcing, often in hybridised forms. These models leverage collaborative vehicles such as LATCos (Local Authority Trading Companies), which provide operational flexibility while retaining public accountability and are secured under the Procurement Act’s controlled-entity provisions. However, the successful implementation of strategic contracting is contingent on guaranteed investment in local capacity and training, as authorities without adequate operational strength will struggle to capitalise on the new legislative framework.
Research kindly supported by:
