This document describes the principles that NICE should follow in designing the processes it uses to develop its guidance (recommendations), and in developing individual pieces of guidance. It is mainly about the judgements that NICE and its advisory bodies should apply when making decisions about the effectiveness and cost effectiveness of interventions, especially where such decisions affect the allocation of NHS resources. This document was developed by the board of NICE. It builds on the first edition of 'Social value judgements', which was prepared in 2005. All NICE guidance, and the procedures NICE uses to develop its guidance, should be in line with the Institute's legal obligations and the social value principles set out in this document. If any parts of NICE's guidance do not conform to these principles, NICE and its advisory bodies should identify them and explain the reasons why.