Businesses seeking major government contracts will be judged more heavily on the jobs, skills and opportunities they promise to create in local communities under new procurement rules announced by the Cabinet Office.
The revised Social Value Model will apply to central government procurements beginning on or after 1 January 2027. Ministers say it will use approximately £90 billion of annual government purchasing power to support British employment, apprenticeships, training and work experience.
The change does not automatically reserve contracts for British-owned companies. UK and international suppliers will be eligible to compete, but bidders will be assessed on the benefits they commit to delivering through the contract.
Weighting doubled for contracts worth £5 million
For covered contracts worth at least £5 million, social value must account for a minimum of 20% of the relevant tender score, double the previous 10% weighting.
Contracts valued at £1 million or more but below £5 million will retain a minimum 10% weighting. Procurements below £1 million will generally sit outside the mandatory model, which the Government says should reduce obstacles faced by smaller firms and social enterprises.
The policy applies to central government departments, executive agencies and non-departmental public bodies. Other public authorities may choose to adopt it, but it is not a universal requirement covering every council or public-sector purchase.
Jobs, apprenticeships and work experience
Bidders will be able to score points by committing to create or retain good-quality jobs in the relevant area, tackle skills shortages and improve recruitment opportunities for people facing barriers to employment.
The model specifically highlights young people who are not in education, employment or training, care leavers and people with long-term health conditions. Suppliers may also offer apprenticeships, training and substantial work-experience placements, with the Government identifying 45 days of work experience as an example of meaningful delivery.
Credit may also be awarded for pay above the statutory minimum, fair working conditions, access to trade union representation and support enabling people to remain in work and progress in their careers.
“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,” First Secretary of State Louise Haigh said.
“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.”
Suppliers will be measured against promises
The reforms include an attempt to prevent attractive employment pledges disappearing after a contract has been awarded.
For contracts worth at least £5 million, departments must set at least one social-value key performance indicator. Progress against major commitments will be reported publicly at least once a year through the Government’s central procurement platform.
Evidence of poor performance may be taken into account when deciding whether there are grounds to exclude a supplier from future tenders.
Cabinet Office Minister Mark Ferguson said companies benefiting from billions of pounds in taxpayer-funded contracts would be expected to give back by creating local jobs and opportunities.
Broader requirements streamlined
The new model narrows the central social-value framework around employment, skills and economic opportunity. The Government says removing numerous separate requirements will make procurement less of a bureaucratic exercise and allow smaller or innovative suppliers to compete more effectively.
However, the change has attracted criticism because previous criteria relating to environmental goals and several wider social issues are no longer part of the core model. Environmental campaigners argue that local job creation and progress towards net zero should not be treated as competing objectives.
Contracting authorities will still have to comply with other legal duties and may use relevant, proportionate award criteria connected to a contract. The revised model changes the mandatory central framework; it does not repeal environmental, equality or employment law.
A welcome test of public spending
Directing more of the tender score towards jobs and training is a welcome objective, particularly if it opens routes into employment for young people and produces opportunities outside the South East.
The test will be whether the commitments are specific, measurable and delivered in the communities concerned. Large suppliers are often better equipped than small firms to prepare sophisticated tender submissions, so simplifying the paperwork must be matched by a genuinely accessible bidding process.
Detailed technical guidance is expected in autumn 2026 before the model takes effect in January. Its success should ultimately be judged by the jobs, apprenticeships and skills created rather than the number of promises included in winning bids.