An Introduction to Social Value

What is social value?

Social value refers to the outcomes that can be generated through public spending, creating additional broader social, environmental and economic benefits for local communities. Government grant recipients can often use procurement and project delivery to create positive impact for residents, communities, and the environment.

In the context of the Warm Homes funding, social value may include reducing fuel poverty, improving health outcomes, creating local jobs, and supporting the transition to net zero. 

Why social value matters

Social value can be used as a powerful lever for delivering long-term, meaningful change in communities. For grant recipients, it offers a framework to align investment with broader social, economic, and environmental goals.

Policy drivers and strategic alignment

The UK government has made social value a cornerstone of public procurement:

• It requires a minimum 10% weighting for social value in central government contracts, encouraging public bodies to consider how their spending can deliver wider benefits
• The Procurement Act 2023 and the Social Value Model, updated under the Procurement Policy Note (PPN) 002, provide a structured approach to embedding social value in procurement, with themes such as tackling economic inequality, fighting climate change, and improving health and wellbeing
• From February 2025, new key performance indicators (KPIs) will require grant recipients  to report on specific social value outcomes, increasing transparency and accountability in this area. This stems from the Procurement Act and PPN 002

These policy levers are not just compliance tools. They are opportunities to demonstrate leadership, innovation, and impact.

Tackling fuel poverty and health inequality

The Local Grant and the Social Housing Fund are designed to address fuel poverty, but their benefits extend far beyond energy efficiency:

• Health: Cold homes are linked to respiratory and cardiovascular illnesses. Warmer homes reduce hospital admissions and improve mental wellbeing
• Education: Children in warm, stable homes are more likely to attend school regularly and perform better academically
• Social inclusion: Energy-efficient homes reduce financial stress, helping residents participate more fully in community life

By embedding social value into retrofit and energy programmes, grant recipients can deliver co-benefits that align with NHS priorities and local authority health strategies.

Environmental sustainability and net zero understanding

Grant recipients can contribute significantly to environmental sustainability by implementing a range of targeted actions. These include reducing carbon emissions through energy-efficient upgrades to homes, such as improved insulation, low-carbon heating systems, and smart energy technologies. Alongside this, promoting behavioural change among residents through engagement and education initiatives helps encourage more sustainable living practices.

Positive community outcomes from localised retrofit projects can lead to greater resident buy-in for retrofit. This can maximise the delivery and the impact of the initial retrofit projects to make long lasting change to residents’ opinions and understanding of retrofit and sustainability within housing.

Community trust and organisational reputation

Delivering social value builds trust with residents, funders, and partners. It shows that grant recipients are not just landlords, but anchor institutions committed to social justice and community wellbeing.

• Transparent reporting on social value outcomes enhances credibility
• Co-designed initiatives foster stronger relationships with residents and others, including local authorities if they are not the stockholder
• Demonstrating impact can unlock future funding and partnership opportunities

Social value upskilling the workforce 

Social value can be a catalyst for inclusive economic development:

• Local employment: Prioritising local labour and small and medium-sized enterprises in procurement supports job creation and keeps wealth within communities. Specifically, we can create employment for residents within retrofit so that we can build a better understanding of the facilitation of retrofit for residents
• Skills and training: Initiatives like apprenticeships, work placements, and upskilling programmes help residents access better employment opportunities
• Social enterprises: Partnering with mission-driven suppliers can amplify impact and foster innovation

These interventions not only support residents but also strengthen the resilience of local economies by providing jobs and training in a growing industry known to have skills shortages. This helps to foster low-carbon supply chains, while also reinforcing the long-term transition to a net zero future at a local and national level.

Skills shortages

Energy Systems Catapult, in line with the Fair Future Programme, has conducted two types of research on the diversity and inclusion of green job upskilling in heating and energy.  A study of the current training provisions specifically in the south-east of the UK identified that for 10 million homes in the area reaching Net Zero by 2050 will require an estimated 46,500 full-time equivalent (FTE) workers annually.  When considering factors like part-time work, servicing needs, and peak demand, the retrofit workforce could need to average new 100,000 workers per year. In addition, an estimated 500,000 training courses will need to be provided to support the upskilling and retraining of individuals already in the industry.

Barriers

The shortage of skilled workers is clear. However, existing barriers to involvement mean that the shortage does not translate into a demand for training. Key barriers include:

Training and qualifications:

• Most low-carbon technology roles have existing training, but many courses are outdated and need improvement
• Customer engagement and care skills are lacking in current standards
• No training exists for retrofit evaluation, a key part of ensuring quality outcomes
• Training quality is hard to benchmark, with inconsistent feedback and unclear learning outcomes
• General builders, often relied on for retrofit work, have limited access to optional retrofit training

Demand for training:

• Unclear policies and regulations reduce demand for training
• Despite net zero targets, training places often go unfilled, even when free
• Low-carbon careers are poorly understood, especially by school leavers
• Career pathways are confusing, with too many fragmented qualifications

Tutors and training facilities

• There’s a shortage of skilled tutors, and industry professionals are reluctant to switch due to lower pay in education
• Further Education colleges struggle to recruit and upskill tutors, even when their courses are subsidised as accredited Continuing Professional Education
• Training facilities often don’t reflect real-world conditions
• Lack of coordination between colleges leads to inefficiencies in course and facility planning

Sector diversity

• There is evidence to show that everyone benefits when the housing and construction sectors are more diverse (see Housing Diversity Network and Building Women for examples of the discussion).
• This is a challenge for the sector, which is well recognised as not being reflective of society’s diverse make up. For example, the Chartered Institute of Builders (CIOB) has found that:

• Only 15% of the workforce is female, with approximately 2% working on-site
• BAME employees make up 6% of the workforce
• Disabled employees also make up 6% of the workforce
• 60% of LGBTQ+ employees have experienced homophobic and derogatory terms at work

• Although there are cultural reasons, such early gender stereotypes that discourage people from pursuing construction trades, employers can use recruitment, training, social networks to make construction careers more attractive (see actions below)

Actions to overcome the barriers

There has been some progress in the area with next steps and actions already taken to provide inclusion and a better standard of training and workforce development:

National coordination and standards:

• A unified national approach is needed, involving stakeholders like regional Net Zero Hubs, government departments, accreditation bodies, and local authorities
• Industry collaboration should focus on updating standards for emerging roles (e.g., retrofit assessors, advisors) and integrating retrofit-specific modules into existing construction qualifications

Boosting demand for green jobs:

• Run awareness campaigns in the media to promote retrofit as a green career with clear pathways and development opportunities. This will increase public understanding and interest
• Run careers sessions in schools to encourage young people to pursue green jobs and careers
• Ensure local area energy plans are backed up with detailed modelling of the skills needed to deliver the retrofits required by government funded projects and regulatory ambition

Skills accelerator and learning resources:

• Develop a skills accelerator to create modern learning materials using insights from innovation projects
• Launching free, flexible learning portals
• Pilot online, face-to-face, and hybrid courses
• Expand skills bootcamps with more time and funding for resource development

Improving training quality:

• Link training outcomes to customer satisfaction through rigorous evaluation of retrofit measures
• Encourage knowledge sharing between colleges, independent providers, and industry experts
• Promote alternative teaching methods (e.g. peer-to-peer, online platforms like Heat Geek)
• Modernise facilities using best-practice benchmarks and pilot “learning factory” models

A more inclusive sector

• Use recruitment and flexible working policies to encourage more diverse groups in construction roles
• Build on the success of the renewable energy sector to attract more women and younger people due to its alignment with values like sustainability and purpose. Similar opportunities may exist in other aspects of the housing decarbonisation sector
• Communicate the benefits of inclusion to the existing workforce
• Support underrepresented groups to form their own supportive communities
• Don’t allow positive discrimination to be tokenistic. Hire individuals on their own merit and provide proper support, such as conversations about bias and culture, and creating safe and inclusive spaces for all

 The steps above imply that increasing diversity is not just ethical, but culturally, socially, and commercially beneficial. Establishing a more inclusive industry is also essential to addressing the skills shortage and meet net zero goals. Catapult have recognised the improvements required across the industry to grow the workforce and create effective social value opportunities that can be facilitated respectfully with the right training and support. Introducing training as a social value piece will help facilitate this sort of work locally.

When to embed social value 

Social value should be considered at every stage of the procurement lifecycle:

Best practice examples

1. Gentoo Group: Delivered over £1.5 million in social value through retrofit programmes by employing local contractors and offering apprenticeships.
2. Nottingham City Homes: Integrated social prescribing into their Warm Homes programme, linking residents to health and wellbeing services.
3. South Yorkshire Housing Association: Used Warm Homes funding to co-design energy advice services with tenants, improving engagement and outcomes.

Designing for impact

Social value should go beyond corporate social responsibility (CSR). It requires:

• Intentionality: Define specific, measurable outcomes
• Integration: Embed social value into core business processes
• Innovation: Tailor interventions to local needs—e.g., digital inclusion, or community retrofit champions

How to deliver social value

Delivering social value is designing purposeful, measurable interventions that create outcomes contextually relevant to said communities. For applicants, this means embedding social value into every stage of the procurement and project lifecycle, from early planning to delivery and evaluation. It requires collaboration with suppliers, alignment with strategic goals, and a clear focus on outcomes that matter to residents. This is best aligned to local core values by engaging with the community and taking a structured and intentional approach for designated investment that achieves lasting impact.

Linking policy to procurement

To deliver social value effectively, applicants can take a strategic and structured approach by:

• Aligning procurement practices with both national priorities and local community needs. Requirements should be better understood through community engagement
• Framing tender requirements around clear, outcome-focused objectives that reflect desired social impacts
• Incorporating social value as a weighted evaluation criterion, ensuring it carries at least 10% of the overall tender score
• Tracking and reporting progress through defined KPIs to ensure accountability and continuous improvement

Using an existing framework

Social Value Model

The purpose of the guide is to support public sector organisations in applying the Social Value Model throughout the commercial lifecycle of procurement. It is designed for a wide range of professionals involved in public procurement, including commercial practitioners, finance teams, policy and planning professionals, and contract managers. The guide ensures that social value is embedded consistently and effectively in procurement processes, helping to deliver broader benefits to society alongside core contract outcomes.

The TOM System (Themes, Outcomes, and Measures)

This framework offers applicants a practical and credible framework to plan, deliver, and report social value outcomes as part of their Warm Homes Fund projects. It helps translate retrofit and energy-efficiency investments into measurable benefits for residents, communities, and the environment:

Key features of TOMS

• Evidence-based and standardised: The TOMs offer a consistent way to measure impact across projects, making it easier to benchmark performance and report to funders like the Warm Homes Fund
• Customisable: Applicants can tailor the TOMs to reflect local priorities, such as targeting vulnerable households or supporting local supply chains
• Financial valuation: By assigning monetary values to social outcomes, associations can clearly demonstrate return on investment and value for money
• Independent validation: Using the TOM System through platforms like the Social Value Portal ensures transparency and credibility in reporting

By embedding the TOM System into procurement and delivery processes, applicants can not only meet the Warm Homes Fund’s objectives but also unlock broader social, economic, and environmental benefits.

Conclusion 

Social value is a strategic tool for grant recipients to deliver better outcomes for people and places. By embedding it into procurement and project design, especially through initiatives like the Warm Homes Fund, housing providers can play a pivotal role in building fairer, healthier, and more sustainable communities.