Background
On 5 August 2026, the Government issued Procurement Policy Note (“PPN”) 026, introducing a new Social Value Model for procurements conducted by ‘in-scope organisations’, which are defined as central government departments, their executive agencies and non-departmental public bodies. Applicable from 1 January 2027, the PPN 026 refocuses social value requirements on supporting jobs, skills development and ensuring that public sector spending delivers local economic growth, reflecting the UK Government’s wider growth and employment objectives.
What is the purpose of PPN 026?
The previous PPN related to Social Value (PPN 002) covered a wide range of issues, including environmental benefits. The new PPN 026 narrows the focus to good jobs, fair pay and working conditions, skills development and pathways into employment.
The focus on employment and skills development seeks to drive economic growth by leveraging the UK Government’s expenditure, to ensure public contracts create wider economic benefits than just the services being procured.
By requiring organisations that bid for public contracts to demonstrate how they will deliver employment and skills outcomes alongside contract performance, the UK Government aims to ensure that public spending contributes directly to productivity and workforce development to create sustainable jobs and strengthen local economies.
The increased importance of social value reporting in larger procurements is also evidenced within PPN 026. For contracts valued at £1 million and above, but less than £5 million, a minimum 10% weighting (or equivalent measurement) is required and for contracts valued at £5 million or above, a minimum 20% weighting (or equivalent measurement) of the total score that may be given to tenders.
So what happens next?
In-scope organisations should begin reviewing and altering their procurement processes as necessary in preparation for the new model taking effect from 1 January 2027. The key point will be to ensure that the relevant social value criteria are incorporated into procurements valued at £1 million or more.
Organisations bidding for public contracts should consider how they can demonstrate their commitment to job creation, fair working conditions and skills development. Evidencing supporting apprenticeships and training programmes will become increasingly important in tenders following the issue of PPN 026.
Associated guidance to assist organisations with compliance is expected to follow later this year.
Conclusion
PPN 026 represents a shift in the UK Government's approach to social value in procurement, moving away from a broad range of objectives and towards a more targeted focus on jobs, skills and economic growth.
By increasing the weighting of social value, particularly in larger procurements, and requiring suppliers to demonstrate tangible employment and workforce development outcomes, the UK Government’s new approach seeks to ensure that procurement of public contracts deliver lasting benefits for local communities, as well as value for money.
As the implementation date of 1 January 2027 approaches, both contracting authorities and suppliers should use the transitional period to review their current practices and prepare for the new requirements. Those organisations that can clearly evidence their contribution to job creation, skills development and fair working practices are likely to be best placed to succeed under the new PPN 026 Social Value Model.
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With assistance from Millie Shaw, who is a trainee in our commercial team.
