By Chloe Nelson, Associate of Economics at Pegasus Group
NPPF: Why developers and public bodies must prove social value in schemes
Here’s a question for developers and housebuilders: how is your scheme delivering social value? It’s becoming increasingly important to answer. One timely reason why is how the National Planning Policy Framework (NPPF) codifies social value as a material consideration for sustainable residential and commercial developments.
Public authorities are increasingly asking developers to prove in their planning applications how they will tangibly improve an area’s socio–economic wellbeing.
There is a need, therefore, for planning applications to demonstrate how they will provide tangible social value outcomes, which requires evidence and measurement...
What does social value mean in modern developments?
Social value is borne out of the Public Services (Social Value) Act 2012. Since its adoption, all public authorities have been legally required to consider how a proposal might improve an area’s economic, social, and environmental wellbeing, as well as how the procurement process will secure that improvement.
The UK Green Building Council gives the following definition:
“In the context of the built environment, social value is created when buildings, places and infrastructure support and enhance environmental, economic and social wellbeing – through this improving residents’ quality of life.”
The importance of social value has only strengthened over time, with the Procurement Act 2023 raising its importance in procurement decisions. This came into force in February 2025 alongside a new, updated Social Value Model (PPN 002/003).
Under section 12 of the Procurement Act 2023, contracting authorities must “have regard to the importance of maximising public benefit” when awarding contracts. The National Procurement Policy Statement (NPPS) released alongside the Act in February 2025 reinforces Social Value as a core priority in public procurement.
This marks a major shift from the Social Value Act 2012, which only required authorities to ‘consider’ social value. It also places greater legal onus on ensuring that public contract awards deliver measurable social, economic, and environmental benefits.
What does the NPPF say about social value?
Paragraph 8 of the NPPF outlines three interdependent pillars of ‘sustainable’ development: Economic, Social, and Environmental. All of these objectives are aligned with the aims of the Social Value Act:.
- Economic Objective: To support economic growth by ensuring the right land and infrastructure are available where and when most needed.
- Social Objective: To support thriving communities by providing enough homes and creating well-designed, safe places with accessible services and green spaces that promote wellbeing.
- Environmental Objective: To protect and enhance the natural, built, and historic environment by using land and resources efficiently, reducing pollution, supporting biodiversity, and tackling climate change.
Paragraph 96 of the NPPF further states that planning policies and decisions should aim to achieve safe, healthy, and inclusive places that promote social interactions and accessibility.
How should developers and public bodies interpret what constitutes a ‘sustainable location’ for development?
In short, the NPPF makes it clear that sustainability and social value are intertwined. However, decision-makers must also apply a pragmatic interpretation of what constitutes a ‘sustainable location’ for development.
This is especially important for many rural sites, which are unlikely to be well served by frequent public transport but may be located close to strategic infrastructure like a motorway or A-road junctions. The proximity to these is often a key consideration for the location of commercial developments and can be a more integral consideration compared to its accessibility by public transport.
If decision-makers apply too rigid or narrow an interpretation of sustainability based primarily on public transport accessibility, this risks undermining the development the NPPF seeks to support. In such locations, sustainability should also be understood in economic and functional terms.
For example, a sustained contribution to local and regional employment, supply chain
efficiency, and economic resilience should contribute to its suitability as a sustainable location when considering commercial development. A broader application of ‘sustainable location’ regarding access to public transport should therefore be applied.
How do you demonstrate social value in a development?
To demonstrate how these objectives are met, planning applications need evidence. Social Value measurement enables you to quantify improvements to residents’ quality of life, through impact on wellbeing. For example, this includes the benefits to residents of areas such as the local environment, health and wellbeing, and economic benefits. By using social value measurement methodologies, we can demonstrate how a proposal will deliver tangible impacts for local residents and communities.
Social Value calculations apply a monetary value to outcomes for which there is no typically established market value, in recognition of the value they provide to local people and places.
Our Economics experts at Pegasus use these social value measurement methodologies to show how proposals will add value to communities. For example, a recent analysis to support the planning application for a residential scheme delivering up to 190 homes in North West England found that:
- £818,005 in social value would be delivered as a result of the provision of a new cycle path, promoting active travel for residents and increasing connectivity to existing recreational routes, public open spaces, and new non-residential facilities.
- £321,556 in social value would be delivered for children living within the Proposed Development as a result of the provision of Local Areas for Play, increasing children’s wellbeing thanks to more opportunities for play.
- £56,468 in social value to individuals because of apprenticeships likely to be provided during the building of the scheme, supporting young people looking to enter the construction industry.
- £166,111 in social value associated with residents living near green open space being delivered within the scheme.
Social value quantification also provides a mechanism for developers and public bodies to monitor the commitments they make during the planning process. These can be tracked to ensure that they are aligning to council expectations in relation to social value.
Any planning application must also consider wider economic benefits, as well as local infrastructure that makes everyday life practical for residents, including but not limited to:
- New employment and training opportunities, which is often prioritised by Councils in provision of social value.
- Frequent, reliable public transportation that reduces reliance on cars and lowers carbon footprint.
- Walkable neighbourhoods, designed with safety in mind.
- Schools and GP surgeries near homes, plus other social care provisions like elderly care facilities that reduce strain on public services.
- Retail, leisure venues, and other commercial spaces within easy reach of homes.
- Energy infrastructure that can power communities locally – and which, among other benefits, reduces the strain on the UK’s national grid.
- Vibrant town centres, public realm spaces, and other social infrastructure that enhance people’s mental and physical wellbeing.
- Green spaces and green infrastructure.
If you need support in proving the social value of a scheme you’re in the planning stages for, our team at Pegasus Group would be delighted to help. Reach out to our team today to learn more.