- By Sian Clay
- In Analysis & Thinking, Policy & Drivers, Social Value
PPN 026: What the new Social Value Model means for public sector procurement
Social value has been part of public procurement for years, but what counts as “value” is about to change.
The government has published a new Social Value Model for central government procurement, replacing PPN 002 from 1 January 2027. Our Social Value Lead, Siân Clay, has taken a closer look at what has changed, why the government has taken this approach, and what it could mean for organisations bidding for public sector contracts.
A new direction for social value
PPN 026 introduces a revised Social Value Model for central government departments, executive agencies and non-departmental public bodies.
It applies to central government procurement worth £1 million or more (including VAT) that commence from 1 January 2027. Other public sector organisations, including local authorities, are not required to adopt the model, although they may choose to do so.
The government’s stated aim is to simplify the approach and ensure public spending supports “good British jobs, skills and opportunities in every postcode”.
From broad social value to targeted impact
The previous Social Value Model covered a broad range of priorities, from environmental outcomes and supply chain diversity to equality, wellbeing and community benefits.
PPN 026 takes a different approach. It focuses on two outcomes:
- Good jobs – supporting quality employment, fair pay and good working conditions.
- Skills – developing skills, addressing shortages and creating pathways into employment.
Some areas that featured in PPN 002, including environmental outcomes, SME and VCSE participation, modern slavery and wider equality measures, have been completely removed from the new model.
This change seems to be following conversations already happening across industry about where organisations can create meaningful local impact. Skills shortages, supporting young people into careers, improving access to employment and creating opportunities for people facing barriers to work are all challenges many sectors are already trying to address.
The difference is that these areas will now sit at the centre of how suppliers demonstrate social value in government contracts.
Social value becomes more important for larger contracts
One of the biggest practical changes is the increased weighting for larger contracts.
Under PPN 026:
- contracts between £1 million and £5 million must include a minimum 10% social value weighting
- contracts worth £5 million or more must include a minimum 20% weighting
The increase in the threshold to contracts worth £1million or more is significant. Compared with the previous model, fewer smaller procurements will fall within the mandatory requirements, which is likely to reduce the administrative burden for both contracting authorities and suppliers bidding for lower-value contracts.
For sectors such as construction, infrastructure and facilities management, where contracts frequently exceed £5 million, social value could become a much more significant part of the tender process.
The model also strengthens accountability. For central government contracts over £5 million, suppliers will need to deliver at least one social value KPI, meaning commitments made during the bidding process will become part of contract delivery.
What does this mean for suppliers?
The organisations best prepared for PPN 026 will be those that already understand their social impact and can back up their commitments with evidence.
Broad statements about supporting communities are unlikely to be enough. Suppliers will need to show how they create opportunities, develop skills and respond to local workforce needs.
That could mean having a stronger understanding of:
- workforce data and skills gaps
- apprenticeship and training activity
- recruitment and progression opportunities
- partnerships that support access to employment
The emphasis is likely to shift from promising social value to demonstrating it.
Will PPN 026 affect private sector procurement?
Not directly. PPN 026 only applies to central government procurement, and private sector organisations are not required to follow it.
However, public procurement often influences wider expectations. Suppliers frequently use similar approaches across public and private sector bids, and the increased focus on measurable outcomes could shape how organisations communicate social impact more broadly.
For private sector procurement teams, the wider lesson remains relevant: social impact is increasingly moving away from broad commitments and towards clear evidence of impact.
Preparing for PPN 026?
The shift from broad commitments to measurable outcomes means suppliers will need to think more carefully about how they evidence social value.
If you’re reviewing your approach to social value, ESG or public sector bids, we can help you turn your impact into clear, credible communications that stand up to scrutiny.
Get in touch with the Content Coms team to talk about how we can help.
