In August 2026, the UK Government issued Procurement Policy Note 026 (PPN 026), which focuses on social value in public procurement and sets out its aim for public spending to support British businesses and drive growth. Read the full note here.

The policy defines social value for central government contracts as considering how suppliers will deliver “good British jobs, skills and opportunities in every postcode”, ensuring procurement supports communities most in need while improving productivity across the country.

This insight discusses PPN 026 in detail, considering the scope of application, what it aims to achieve and what actions organisations should take – including how Capsticks can help your organisation undertake them.

Scope of application

PPN 026 applies to bodies that are referred to as “in-scope organisations”. These are:

• Central government departments
• Executive agencies
• Non-departmental public bodies

Other public sector organisations (such as NHS Trusts, NHS Foundation Trusts and local authorities) may also follow the approach.

PPN 026 applies only to covered procurements commenced under the Procurement Act 2023 with a total contract value of £1 million or more, inclusive of VAT. It does not apply to private utilities contracts or to procurements where the primary purpose is overseas delivery, such as contracts relating to embassy services.

In-scope organisations should apply the PPN to procurements commenced on or after 1 January 2027, with a procurement treated as commenced when the tender notice is published. For procurements started under the Procurement Act 2023 before that date, organisations are encouraged to transition to the updated Social Value Model, although the previous edition may still be used where adopting the new model would require disproportionate resources or undermine earlier market engagement. Additional guidance is expected in autumn 2026.

Procurement framework in the Social Value Model

For frameworks, social value should be considered both when the framework is established and at call-off stage, in line with forthcoming PPN 026 guidance expected in autumn 2026. More generally, the PPN should inform all stages of the commercial lifecycle – social value is not only relevant to the procurement stage, but it also needs to be delivered and managed during the implementation of a public contract. Relevant model award criteria should be applied in a way that is proportionate, connected to the subject matter of the contract, does not create unnecessary supplier burdens or barriers to participation, and does not discriminate against treaty state suppliers in compliance with the Procurement Act 2023 requirements.

What actions should organisations take under the Social Value Model?

Outcomes

In-scope organisations should apply the Social Value Model by selecting a relevant delivery outcome from Annex A of the PPN (Outcome 1: Good Jobs or Outcome 2: Skills), together with the corresponding award criteria and any future sub-criteria set out in guidance. These criteria should be included in the tender documents, alongside details of any relevant community programmes published with the accompanying supplier guidance.

Value of contract

The required weighting depends on contract value. For contracts worth more than £1 million but less than £5 million, at least 10% of the total tender score should relate to social value. For contracts worth £5 million or more, this increases to at least 20%. Where an absolute evaluation methodology is used, such as Price per Quality Point or a Value for Money index, the weighting applies to the non-price or overall quality score.

Evaluation methodology

In-scope organisations must assess bids in line with the relevant evaluation methodology, covering both community programme and non-community programme outcomes. They must also ensure that award criteria remain linked to the subject matter of the contract, are proportionate, treat suppliers equally and comply with the Procurement Act 2023, including obligations relating to treaty state suppliers.

Organisational training

In practice, organisations should ensure commercial, procurement and contract management teams are trained on the new requirements and accompanying guidance. Social value commitments made during procurement should be monitored through contractual mechanisms, such as KPIs, and clearly communicated to contract managers. For contracts valued at £5 million or more, at least one social value KPI should be set, published and reported on at least annually through the central digital platform where required. This social value KPI is in addition to the 3 KPIs required under section 52 of the Procurement Act 2023.

Poor performance against social value KPIs may also be relevant when considering whether a supplier should be excluded from future tenders.

Conclusion

With PPN 026, the government aims to place local communities at the centre of procurement decision-making and use public spending to generate wider community benefits. The updated Social Value Model supports this by focusing on the additional value suppliers can deliver through contract performance, rather than price or service delivery alone.

The model has been streamlined to concentrate on outcomes that support economic growth, particularly the creation of good jobs, skills development and opportunities for people who face barriers to employment in local communities. This reflects a broader policy shift towards using procurement as a tool to deliver practical, place-based benefits alongside core contractual requirements.

Capsticks’ view

The changes introduced by PPN 026 are significant for in-scope organisations. The updates give contracting authorities a clearer framework for embedding jobs and skills as social value requirements into tender design, evaluation and contract management.

The new policy requirements could cause some issues for contracting authorities which will need to be considered on a case-by-case basis. These include:

• Demonstrating how social value award criteria are relevant to the subject matter of the contract and proportionate. Some contracts by their nature may struggle to deliver the social value required, for example, because creating local jobs may not be realistic or achievable in that particular market.
• The potential disadvantage to treaty suppliers who may face barriers to creating British jobs due to their location.
• The potential barriers SMEs may face in implementing social value due to the cost impact on their profit margins and the fewer resources available to them.

That said, the streamlined model should provide greater clarity to suppliers on what is expected and how commitments will be assessed, reducing uncertainty and encouraging meaningful, deliverable social value proposals.

How Capsticks can help

Our Procurement specialists support organisations delivering effective public procurements and we offer end-to-end support for organisations navigating the Social Value Model. Our experts can help in designing social value questions, scoring criteria and evaluation methodologies which ensure compliance with the Procurement Act 2023 and PPN 026.

If you are interested in how we may be able to support your organisation in light of this development, please contact one of our procurement specialists: Partner Lucy Woods, Partner Ruth Yates or Principal Associate Ciaran Wells. This article has been prepared with the support of Paralegal Holly Davies.