Centre for Sustainable Business’ (CSB) responsible procurement experts, Professor Jo Meehan and Dr Clare Westcott, explain to us why Sizewell C presents a unique opportunity to radically transform public procurement in the UK, by expanding social value beyond individual projects and throughout the entire system.
Sizewell C is a new nuclear power station under construction in Suffolk. It’s expected to generate 60 years’ worth of low-carbon electricity for around six million homes and 10,000 direct jobs.
As part of its ambition to benefit the entire UK beyond the physical location of the power station, Sizewell C is committed to investing £2.5bn in the North of England.
Since late 2024, Sizewell C has worked with the University of Liverpool and the Liverpool City Region Combined Authority (LCRCA) in a joint project to boost sustainability, skills and economic growth across the region.
Alongside contributions from the Faculty of Science and Engineering1, the Heseltine Institute and the CSB have provided a comprehensive analysis of the North’s institutional landscape, skills base, employers and supply markets.
In particular, the CSB focuses on seizing the opportunity for Sizewell C to become a catalyst for social value expansion, and we spoke to Jo (JM) and Clare (CW) to find out more.
Recent legislative changes have increased pressure on public buyers to strengthen social value delivery in procurement contracts. However, to what extent is public procurement still constrained by dominant economic logics of ‘business-as-usual’?
JM: Currently, most public sector organisations are facing significant cost pressures and are further constrained by an economically dominant system, focused on short-term reporting cycles and a desire to quantify outcomes, using quantitative key performance indictors (KPIs).
KPIs that are easy to measure or compare are often preferred by procurement, which can disincentivise suppliers to offer innovative ‘business-not-as-usual’ alternatives that maximise social value delivery.
For example, suppliers to the public sector are required to offer additional social value commitments beyond core business activities to meet public procurement criteria. But does this really help to expand social value?
A large firm with no local presence, poor employment conditions and aggressive tax avoidance structures may be awarded a contract because it offers an ‘additional’ commitment that scores well under tender evaluation, such as employee volunteering.
In contrast, a local social enterprise providing stable employment to care leavers and reinvesting profits in preventative social programmes, but cannot afford to offer ‘extras’, may be unrecognised as ‘additional’ in the sourcing evaluation.
CW: Our research indicates that while small and medium enterprises (SMEs) represent 99% of UK businesses, and account for roughly 60% of employment and 50% of private sector turnover, many avoid bidding for public contracts.
Incorporating more SMEs into the public sector supply chain inherently generates local social and economic value.
The positive potential has been recognised by the UK Government, as it aims to increase the amount of direct spend with SMEs in public sector supply chains.
However, our research reveals the often hidden resources needed for knowledge acquisition and ensuring compliance with social value requirements.
While many SMEs express a desire to deliver long-term and meaningful social value, the burdens associated with demonstrating ‘additional’ activity are contributing to smaller businesses avoiding or withdrawing from public sector markets.
This can have the effect of making supply markets more concentrated in the hands of fewer large businesses.
This market level impact is largely overlooked but is important, as market concentration is also deeply intertwined with socio-economic inequalities.
For example, research shows that, while it increases the wealth of a country’s 10% richest by 12-21%, income of the poorest 20% is reduced by 14-19%2.
So, there’s a significant opportunity to tackle wider societal challenges by addressing supplier motivations and entry barriers.
Is there potential to expand social value through incremental improvements to existing practices, or do we need a more collective approach to address system gaps?
JM: Social value should not simply be an ‘output’ suppliers deliver through contract add-ons, but right now most procurement operates within the existing supply market structures.
Rather than questioning whether they’re fit-for-purpose, efforts to optimise social value delivery are usually considered within these structures.
This approach reinforces the status quo and overlooks long-term impacts, such as market concentration, fragile supply chains, skill shortages and regional inequalities.
It also hinders our ability to identify opportunities to shape supply markets in ways that support fairness, innovation and sustainability.
Public buyers need to shift attention to the deeper layers that create the conditions for inequalities to persist, and conversely, for social inequalities to be tackled.
This includes the structure of supply markets, collective behaviour of buying organisations in aggregate over time, organisational logics guiding decision-making and a wider economic system that prioritises short-term efficiency over long-term resilience.
If we don’t address these layers, social value initiatives will be unable to achieve their full potential.
CW: For social value outputs and outcomes to enable significant improvements to deep-rooted inequalities, we need a systemic change in the UK economy.
Current social value efforts are largely concentrated at the policy and practice level, which are underpinned by - and therefore constrained by - the prevailing economic system.
Whilst beneficial, these initiatives are predominantly shaped by short term in-contract deliverables, discreet buyer-seller contracts, compliance-focused reporting and price-based decisions, plus they’re at the mercy of political cycles.
The prevailing system can discourage attempts to adopt genuine socio-economic approaches to business, so disrupting and questioning it is a key challenge for truly transformative social value to occur.
You advocate that Sizewell C presents a unique opportunity to transform the system. Why this project in particular?
CW: Mega projects like Sizewell C do more than produce infrastructure, products, or services, as they mobilise extensive multi-tier supply chains that span industries, regions and thousands of workers.
This scale creates a practical and a moral imperative to create the conditions that enable social value outcomes through procurement decision-making.
From a legal perspective, Sizewell C aligns with the ambitions set out in the UK Procurement Act 20233, which moves away from the most economically advantageous tender (MEAT) as the contract awarding criteria.
Instead, it places emphasis on the most advantageous tender (MAT), enabling a shift from the dominant economic logic to a longer-term, more holistic ‘business-not-as-usual’ view of value.
Beyond the primary goal of UK energy security, Sizewell C reflects a broader interpretation of ‘community’, extending impact beyond Suffolk and across the UK.
Due to its extended time horizons and scale of investment, Sizewell C has potential to truly impact deep-rooted structural issues, such as regional deprivation, as well as pioneering novel approaches to supply market shaping.
Our research argues that public procurement - particularly for major infrastructure projects - has the power to act as a market architect, where social value and sustainability are a function of market design.
It’s a brave move that looks at the design of the overall system, not just Sizewell C.
JM: Buying organisations do not just buy from supply markets, they shape them.
Procurement teams wield considerable influence over which firms grow, which practices are rewarded and how resources, value and opportunities are distributed across supply chains.
For example, while individual buying organisations may act responsibly by embedding social value and sustainability requirements into their procurement decisions, the cumulative long-term impact of multiple buyers across many organisations acting independently is often overlooked.
Excessive pressure can be placed on supply markets when buyers pursue their own objectives without considering - or seeing - system-wide effects, affecting everything from critical materials to workforce capacity.
It’s similar to the tragedy of the commons concept where everyone draws from the same pool, yet collectively little attention is paid to maintaining or replenishing the pool.
This risk is particularly acute in service-based markets where demand outstrips supply and capacity cannot be stockpiled in inventories.
When multiple mega projects are simultaneously developed across the country, particular trades may face a tragedy of the commons and create regional competition for skills.
In regions where supplier capacity is stretched and demand fluctuates, workers may also face periods of intense demand followed by sudden gaps in work that threaten job security, skills development and long-term resilience.
It’s imperative to pay attention to market effects beyond the firm, which in this example involves coordinating projects at policy level to manage cumulative demand and protect regional capacity via strategic UK-wide resource allocation.
Sizewell C offers the time and scale required to co-create inter-generational value, and the potential to coordinate across the policy landscape, to pioneer system changes that nurture truly responsible business practices.
In practice, what does the new ‘business-not-as usual’ approach to public procurement look like? What are the next steps?
JM: A fresh strategic framing may reward responsible business models, support SME participation, coordinate demand across regional projects and build regional capability rather than extracting it.
Our ‘business-not-as-usual’ approach can be tricky for organisations, as it requires a focus on macro level4 ‘futures’ and meso level5 impacts across industries, which ultimately transform the meta level6.
We’re working not only with Sizewell C but with a variety of organisations, including the LCRCA7, to help them step into a range of alternative multiple futures.
We facilitate a series of interactive ‘futures’ workshops, where decision makers construct multiple ‘probable’ and ‘plausible’ futures.
This allows them to ‘step into and look around’ to explore and challenge how future social value might look like in each scenario.
Holistically analysing the complex and interacting factors at play in desirable future scenarios, helps reveal deep-rooted but hidden assumptions and blind spots.
More importantly, the process helps identify missed opportunities and explore procurement’s market shaping and social value potential.
This serves as a starting point to define the tasks, policies, responsibilities and actions needed today to shape preferable and socially equitable futures.
CW: While Jo’s research focuses on embedding social value in supply chains and ‘futures’ design, mine looks at suppliers’ barriers to participating in procurement contracts.
We’re bringing both strands together to find out how to improve the ‘half-life’ of social value – how can we create a legacy beyond the completion of a discreet project?
Decisions made in public procurement reflect contrasting approaches on the goals that motivate selecting suppliers and whether the characteristics of the supply market are well understood by public buyers.
On the one hand, we have a ‘market taking’ (short-term, focused on immediate economic benefit) vs a ‘market shaping’ (long-term, focused on creating healthy and sustainable supply chains) approach.
On the other hand, we have a ‘place blind’ (overlooks characteristics of suppliers and communities) vs a ‘place sensitive’ (pays attention to supplier and community characteristics) approach.
While realistically many decisions will still follow ‘market taking’ and ‘place blind’ approaches, we can create further social value by identifying opportunities for sustainable ‘market shaping’, especially in a ‘place sensitive’ way.
It’s no longer about measuring KPIs, but about finding the right conditions for systemic social value to flourish and expand in areas where it’s currently missing.
In addition, we’re using our research to develop a new social value COMMONS (Conditions, Organisations, and Markets for Meaningful Outcomes and Navigating Social Value) toolkit to help organisations and policymakers identify blind spots and opportunities in their supply chain relationships.
Our aspiration is that this facilitates a shift from ‘market taking’ to ‘market shaping’, mobilising bold and collaborative efforts to tackle complex societal challenges.
1 The Faculty of Science and Engineering is currently working with Sizewell C on skills, workforce training and development, and supporting PhD research.
2 See: Ennis, S., Gonzaga, P. and Pike, C., (2017). Inequality: A hidden cost of market power, OECD. 1-58.
3 Effective from 24 February 2025, the UK Procurement Act 2023 introduced stricter rules for the buying of goods and services by public bodies, improving and streamlining the way procurement is done, to benefit prospective suppliers of all sizes, particularly small businesses, start-ups and social enterprises.
4 At the micro level, procurement involves individual buying behaviours (eg suppliers used, prices paid. innovations sought). These practices, collectively and over time, determine the macro-level market performance (ie market share, growth rates, GDP, etc), which is also affected by fiscal and monetary policies, and other state regulations or incentives.
5 At the meso level, patterns emerge from interactions between firms via the cumulative impact of many firms’ sourcing decisions, which are not necessarily in the same supply chain, but use common goods, services or suppliers. At this level, power imbalances and structural inequities often become entrenched, rather than being the function of a single organisations’ sourcing decisions.
6 The meta level represents the prevailing system, experienced through underlying ideologies and assumptions that shape commercial decisions (eg prioritisation of growth, efficiency, competition). Although unseen and seemingly abstract, the meta level is malleable to influence, especially from large projects like Sizewell C.
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Professor of Responsible Procurement and Director of the Centre for Sustainable Business |
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Postdoctoral Researcher and Centre for Sustainable Business Advisory Board Chair |