By JGP Consultancy | Checked against published guidance on 16 October 2026
PPN 026 changes how specified central government buyers assess social value in tenders. From 1 January 2027, it applies to relevant covered procurements worth at least £1 million including VAT, with minimum social value weightings of 10% below £5 million and 20% at £5 million or above. Its focus is jobs and skills. Source: Cabinet Office, paragraphs 4–13.
If you run a small or medium-sized business, check whether the policy applies to the contract you want before deciding what you can afford to offer. Speak to the people who will deliver it and agree the budget before you submit the bid.
The policy explanation below follows the published guidance; the practical recommendations are JGP Consultancy’s advice. The Cabinet Office publication page still says accompanying guidance will follow in autumn 2026. At the date of this review, we could not verify publication of that guidance. Detailed scoring arrangements and some implementation questions therefore remain open. Source: PPN 026 publication page.
What PPN 026 means
PPN means Procurement Policy Note. PPN 026 is the Cabinet Office’s revised Social Value Model, published on 5 August 2026. It sets out how in-scope buyers should take account of employment and skills benefits when buying goods, works or services through covered procurements under the Procurement Act 2023. Source: PPN 026.
The policy has two outcomes: good jobs and skills. Between them sit six model award criteria, covering job creation or retention, working conditions, pay, training, progression and future workforce needs. Buyers select relevant criteria for the contract; this is not a requirement for every bidder to promise something against all six.
Which contracts it covers
PPN 026 applies to central government departments, their executive agencies and non-departmental public bodies. Other public sector contracting authorities may choose to adopt the approach. It is therefore wrong to assume that every council, NHS organisation or other public buyer must use it simply because it buys with public money.
For an in-scope buyer, the policy applies to covered procurements under the Procurement Act 2023 with a total contract value of £1 million or more, including VAT. That is the value of the contract, not your business’s turnover or an annual spending figure. Valuation follows the Act’s rules.
The word ‘covered’ matters. The procurement must meet the Act’s applicable threshold and must not be exempt. For example, the ordinary works contract threshold from 1 January 2026 is £5,193,000 including VAT. A standalone works contract below that threshold does not become covered procurement simply because it exceeds £1 million. Sources: Cabinet Office threshold guidance, PPN 023, Annex A.
Private utilities contracts are excluded, as are contracts whose primary purpose is delivery overseas. Criteria must relate to the subject matter of the contract and be proportionate. They must not create unnecessary burdens or barriers to participation, or discriminate against suppliers protected by the UK’s treaty obligations. Source: PPN 026, paragraphs 4–8 and 14.
If you mainly bid for smaller contracts, do not read the £1 million threshold as permission to ignore social value. It defines the scope of this policy. Read the requirements in each tender, including where a buyer uses a different approach.
When PPN 026 takes effect
The start date is 1 January 2027. For this purpose, a procurement starts when its tender notice is published. The relevant date is not the bid deadline or the day the successful supplier starts work.
There is a transition provision. For procurements started under the Procurement Act 2023 before that date, in-scope buyers are encouraged to move to the revised model. They may use the previous edition where changing would require disproportionate resources or invalidate earlier market engagement. A tender issued before January therefore needs checking on its own terms. Source: PPN 026, paragraphs 10–12.
Social value weightings under PPN 026
| Total contract value, including VAT | Minimum social value weighting |
|---|---|
| Below £1 million | Outside PPN 026’s value scope |
| £1 million to less than £5 million | 10% |
| £5 million or more | 20% |
These are minimums for procurements within scope. At exactly £5 million, the 20% minimum applies.
The percentages normally apply to the total tender score. PPN 026 makes a specific exception for absolute evaluation methods, such as Price per Quality Point or a Value for Money index: the percentage then applies to the non-price criteria, or overall quality score. Check the evaluation method before interpreting what the weighting means for your bid. Source: PPN 026, paragraph 13.
What changes from PPN 002
PPN 002 specified a minimum 10% social value weighting for its in-scope procurements. PPN 026 introduces the £1 million value floor and a higher minimum weighting at £5 million, alongside a model focused on good jobs and skills. Its Annex A has two outcomes and six award criteria. Sources: PPN 002, paragraphs 6 and 10, PPN 026, paragraph 13 and Annex A.
Do not replace every existing social value answer with a jobs-and-skills answer immediately. The buyer’s policy, the procurement’s timing and the actual question still govern the response.
Nor does the change remove environmental requirements from public procurement. In a written parliamentary answer on 24 September 2026, the Cabinet Office confirmed that environmental standards and net zero commitments remain in contract specifications and technical requirements where appropriate. Source: UK Parliament.
The six model award criteria
The table below paraphrases Annex A. The preparation suggestions are JGP Consultancy’s advice, not a prescribed evidence list or a promise of marks.
| Criterion | What the model covers | What an SME could prepare |
|---|---|---|
| 1a. Job creation and retention | Quality jobs, recruitment and retention approaches, and relevant skills shortages | A contract workforce plan explaining which jobs will be created or retained and why |
| 1b. Fair working conditions | Working conditions beyond statutory minimum requirements and support for people facing difficulties at work | Specific arrangements for the contract workforce, with responsibility for delivery |
| 1c. Fair pay | Pay beyond the statutory national minimum wage and remuneration policies that reward and retain staff | A costed explanation of the pay arrangements being offered |
| 2a. Training and retraining | Skills shortages and support for people facing barriers to work, including solutions designed with communities | A training proposal based on an identified need and a credible delivery partner where needed |
| 2b. In-work progression | Skills development that helps people move into higher-paid work | A progression route linked to training and suitable roles |
| 2c. Talent pipeline | Future contract workforce needs, with opportunities designed with communities to address barriers to entry | A plan for relevant pre-employment training, placements or apprenticeships |
The policy identifies groups for forthcoming guidance, including people outside employment, education or training, people moving from education into work, those with a long-term health condition or disability, and care leavers. It also says further communities facing employment barriers will be addressed in that guidance. Avoid treating the current list as the final set of definitions.
Preparing a response your business can deliver
Start with the question and the scoring criteria. Then speak to whoever will manage the contract, and to the person who controls the budget. They need to agree the offer before it becomes a bid commitment.
Our recommendation is to record the following for each proposed commitment:
- The employment or skills need it addresses, and its connection to this contract.
- The activity you will provide, who it is for and when it will happen.
- The person responsible, the cost and any partner whose involvement you need to confirm.
- The evidence you will retain and how you will report progress.
For example, a business bidding for a service contract could propose training that helps eligible members of the contract workforce move into higher-paid roles. It would need to explain the skills gap, how people would access the training and what progression is realistically available. This is an illustration of an approach, not an approved response or a client case study.
Be careful with promises that depend on someone else. If your proposal relies on a college providing training or a community organisation referring participants, check their willingness and capacity before naming them in the bid. Leave enough time for supervision and administration in your costing.
Existing activity also needs care. PPN 026 includes retaining jobs and says further guidance will address existing, inherent social value. It would be premature to say that everything you already do will count, or that only new activity can count. Explain the connection to the contract and ask the buyer how it will be assessed where the tender is unclear. Source: PPN 026, Annex A and notes.
For a smaller business, our advice is to challenge an unworkable requirement through the tender’s clarification process. PPN 026 expressly requires proportionate criteria and asks buyers to research market conditions, including SME participation, before selecting them. The published PPN does not set out a separate SME scoring concession. Source: PPN 026, paragraph 8 and Annex A notes.
Community programmes
PPN 026 says buyers should attach details of available, relevant community programmes from a resource to be published alongside the supporting guidance. It also provides for assessment of both community-programme and other outcomes. It does not say every bidder must use a listed programme. Where a supplier offers to support a listed programme, the KPI should monitor its delivery. Source: PPN 026, paragraphs 13 and 16.
Until the resource and detailed guidance can be checked, avoid building a bid around an assumed approved programme or scoring advantage.
Delivery, evidence and KPIs
PPN 026 says buyers should monitor and measure suppliers’ social value commitments through contractual mechanisms. For contracts with an estimated value of £5 million or more including VAT, it says at least one social value key performance indicator (KPI) should be set, in addition to KPIs required under section 52 of the Procurement Act 2023. Source: PPN 026, paragraphs 16–17.
The Act’s separate requirement to set at least three KPIs generally applies to public contracts worth more than £5 million, with exceptions. PPN 026’s social value KPI threshold includes exactly £5 million. Where the Act’s performance assessment duty applies, assessment is required at least every 12 months and on termination; the contract performance notice normally reports the three most material KPIs. Ask for the contractual measures and reporting timetable before you price your commitments. Source: Cabinet Office KPI guidance.
Agree what evidence will show delivery. Depending on the commitment, that might include training completion records or records of progression into a new role. Decide who will keep those records before mobilisation.
Poor performance can matter beyond the current contract. PPN 026 says evidence of poor performance against social value KPIs can be considered when assessing whether grounds exist to exclude a supplier from future tenders. This is not an automatic ban following a missed target. Source: PPN 026, paragraph 18.
Frameworks and subcontracting
PPN 026 says social value should be assessed when establishing a framework and at call-off, subject to the forthcoming guidance. Its footnote explains that social value must have been assessed at framework level for it to be assessed as part of a call-off. Do not assume that an existing framework can simply have new award criteria added. Source: PPN 026, paragraph 6 and footnote 3.
If you are bidding as a subcontractor, our advice is to ask the main contractor which social value commitments it expects you to deliver and what records it needs. Agree the scope and cost of your contribution in writing. The headline value of the main contract does not tell you what your own obligations will be.
Questions SMEs may have
Does PPN 026 require every SME to offer apprenticeships?
No. Apprenticeships are one example in the model. Your response needs to address the criteria selected for the procurement. Do not commit to an apprenticeship solely because it appears in Annex A. Source: PPN 026, paragraph 13 and Annex A.
Is 45 days of work experience compulsory?
No. Annex A gives 45 days of work experience as an example under the talent pipeline criterion. It does not impose a universal 45-day requirement on bidders. Source: PPN 026, Annex A, criterion 2c.
Does being a British business guarantee extra marks?
No. The policy’s focus on British jobs does not override the requirement to treat suppliers equally and avoid discrimination against treaty-state suppliers. Explain the benefits your contract delivery will provide against the published criteria. Source: PPN 026, paragraphs 8 and 14.
Is there a final PPN 026 template to use?
At our review date, we could verify the policy and Annex A, but not the promised supporting guidance. The policy says detailed sub-criteria and practitioner guidance will follow. Use the buyer’s documents for a live tender, and check the Cabinet Office publication page for updates before reusing an answer.
Support with a live tender
JGP Consultancy’s Tender Guide provides retained support with finding suitable opportunities and preparing bids. Ask us about Tender Guide if you need support with PPN 026 in a live tender.