The PPN 026 Social Value Model changes

By Lisa Reece, Senior Bid Consultant

The Cabinet Office published Procurement Policy Note 026, known as PPN 026, on 5 August 2026. It sets a new Social Value Model for central government and replaces the model issued under PPN 002 in February 2025. The new model applies to procurements starting on or after 1 January 2027, with practitioner guidance and a list of community programmes to follow in autumn 2026.

The definition of social value has also narrowed in this release. PPN 026 describes it as taking account of how a supplier will work for our communities to provide good British jobs, skills and opportunities in every postcode.

What PPN 026 changes for social value at a glance

• Social value now applies to central government contracts worth £1m or more, including VAT
• The minimum weighting stays at 10% between £1m and £5m, and doubles to 20% at £5m and above
• The model shrinks from eight subject areas to two, covering good jobs and skills
• Carbon reduction, supply chain diversity, modern slavery, domestic abuse and community wellbeing leave the model
• Contracts of £5m or more should carry at least one published social value performance measure
• Poor performance against that measure can count against a supplier in future tenders

Does PPN 026 apply to your contracts?

The new model covers central government departments, their executive agencies and non-departmental public bodies. Local government, the NHS and the wider public sector are outside the mandatory scope, though any authority can choose to adopt the approach. If you bid mainly for councils or NHS trusts, your current social value questions will not change on 1 January 2027, although some buyers will follow the central government lead voluntarily.

PPN 002 covered all above-threshold procurement, meaning any contract large enough for the full rules of the Procurement Act 2023 to apply, with no separate cash figure attached. PPN 026 sets a figure, applying only to contracts worth £1m or more in total value, including VAT. Private utilities contracts are excluded, as is any contract whose main purpose is delivery overseas, such as work for embassies.

Frameworks work differently. A framework appoints a group of suppliers, with the individual contracts, known as call-offs, awarded later. Social value should be assessed both when the framework is set up and at call-off stage, in accordance with the guidance due in autumn 2026, and a call-off can only be scored on social value where social value was also scored when the framework was established.

One point warrants care if you work in defence, as PPN 002 excluded Ministry of Defence defence and security contracts. PPN 026 states two exclusions only, private utilities and overseas delivery, and does not restate the defence exclusion, though the effect of that omission is unconfirmed until the autumn 2026 guidance is released.

How many marks is social value worth?

Weighting is the share of the total marks available for a tender. Under PPN 002 the minimum was 10%, so a bid scored out of 100 carried at least 10 marks for social value. PPN 026 maintains that 10% minimum for contracts worth £1m and above but less than £5m and doubles it to a minimum of 20% for contracts worth £5m or above. Where a buyer uses an absolute scoring method, such as Price per Quality Point or a Value for Money index, the same percentages apply to the overall quality score.

For construction, infrastructure and rail work, where values routinely pass £5m, 20% will be the operative figure. At that level social value carries similar weight to major technical criteria, so a weak social value answer can affect the award even where the delivery proposal is strong.

What the new model asks about

Buyers select one of two outcomes for each tender and apply the matching scoring criteria, with six in total.

Good jobs covers the creation or retention of high quality jobs in the relevant area, adapted recruitment and retention procedures helping communities access, obtain and retain jobs, the quality and security of working conditions during delivery and pay above the statutory national minimum.

Skills covers training and retraining to meet skills shortages, progression for existing staff into better paid work and a talent pipeline reaching people who face barriers to employment. The model references 45 days of work experience as an illustration of what it seeks. Named groups will be confirmed in the autumn guidance, and include people not in employment, education or training, people moving from education into work, people with a long term health condition or disability and care leavers.

When it starts

The new model applies to procurements starting on or after 1 January 2027, with a procurement treated as started when the tender notice is published. Buyers may continue with the previous model for procurements started before that date where switching would take disproportionate resources or undo earlier market engagement, so both models will be in circulation through the closing months of 2026.

What this means for small organisations

The removal with the sharpest effect on smaller businesses is the old subject area covering resilient, innovative and flexible supply chains, which existed to support opportunities for small businesses and voluntary, community and social enterprises. Under PPN 002 a buyer could score bidders on opening subcontracts to smaller firms, advertising supply chain opportunities on Contracts Finder and spending measurably with small and medium enterprises, voluntary organisations and start-ups. None of that is retained in the model as published, so a main contractor competing for central government work from January 2027 will not gain marks for the diversity of its supply chain.

However, protections for smaller suppliers remain in a different form. Buyers should research market conditions before choosing their criteria, so that small and medium enterprises, voluntary, community and social enterprises and overseas bidders can all satisfy them, and criteria must avoid unnecessary burdens for suppliers or barriers to participation. The £1m floor also means smaller central government contracts fall outside the new model, so the standard social value question will not apply, which reduces bidding cost for firms competing at that level.

What happens to our social value commitments after award?

A Key Performance Indicator (KPI) is a measure written into the contract against which the buyer tracks delivery. PPN 002 required social value commitments to become contract terms or performance measures of some kind, and its guide advised buyers to consider whether a social value KPI was appropriate, encouraging at least one. PPN 026 firms this up in three ways:

• Commitments should now be monitored through contractual mechanisms such as KPIs, and those measures should be communicated to the contract managers responsible for them.
• Where a supplier offers to support a programme from the forthcoming list of community programmes, the KPI should monitor delivery of that programme.
• Contracts worth £5m or more should carry at least one social value KPI on top of the three or more KPIs the Procurement Act 2023 requires, and all of those measures are published on the central digital platform, the public site holding procurement information, and reported at least once every 12 months.

The third change carries the most risk, which is that evidence of poor performance against social value KPIs can be taken into account when a buyer considers whether grounds exist to exclude a supplier from bidding for future tenders.

Preparing for January 2027

Evidence: Workforce evidence will be central to demonstrating how you will deliver, and have delivered, social value. Pay levels against the statutory minimum, contract types and hours, progression and retention rates, apprenticeship and placement numbers by region and the recruitment routes reaching the named groups will all support responses under the new model. Existing social value material resting on carbon reduction, community investment or supply chain diversity will need redirecting towards jobs and skills for central government work worth £1m or more.

Deliverability: A commitment offered on a contract of £5m or more becomes a published measure carrying consequences beyond the contract itself, so commitments warrant testing against real delivery capacity before submission, with the responsible Lead named and the reporting arrangements agreed in advance.

Need support with social value?

BWL Group advises bidders on social value responses across construction, infrastructure, rail, healthcare and the wider public sector. If you hold central government contracts or intend to bid for work worth £1m or more from January 2027, we can support you. We can review your existing social value evidence against the new model and identify the workforce data needed to answer on good jobs and skills.

Contact our team to book a review of your social value evidence against the PPN 026 model, or email enquiries@bwlgroup.co.uk or call 01325 792744.