Weighting of social value benefits in £5m+ central government procurements to be increased to minimum 20%

In a public procurement note (PPN 026) it said that for contracts valued at £1m and above, but less than £5m, in-scope organisations would have to apply a minimum 10% weighting (or equivalent measurement).

The social value model, which is set out as an annex to the PPN, will “prioritise British jobs, skills, and opportunities for people facing barriers to employment within our local communities”. It is split into two outcomes, (1) Good jobs and (2) Skills, with six award criteria.

The new rules will apply to central government procurements commenced on or after 1 January 2027 following the publication of detailed technical guidance in the Autumn. A procurement is considered to have commenced at the point at which a tender notice is published.

The PPN applies only to central government departments, their executive agencies and non-departmental public bodies ('in-scope organisations').

Other public sector contracting authorities may wish to adopt the approach set out in the policy note, the Cabinet Office said.

First Secretary of State Louise Haigh said: “Every pound of taxpayer money should be spent in a way that benefits local communities - creating good jobs and giving young people the skills they need for the future.

“For too long, securing government contracts has been a tick box exercise that fails to deliver the positive change that people feel in their pocket and see in the places they live.

“We are doing things differently. These new rules will ensure the £90 billion that is spent each year through government contracts supports British jobs, skills and people in every postcode.”