If you’ve been following Social Value in public sector procurement, you’ll know the landscape has been shifting quickly. PPN 06/20 was superseded. PPN 002 came in. And now, just days ago, the government published PPN 026 — a new Social Value Model that comes into force from 1st January 2027.
It’s the second overhaul in eighteen months. And this one is more far-reaching than the last.
Here’s what’s changed, who it affects, and what you should be doing about it now.
Where did this come from?
The short version: a change of Prime Minister.
On 30th June, in his first major policy speech after Keir Starmer announced his resignation, Andy Burnham declared that all public contracts should be subject to “proper social value weighting” to make sure British-based companies are in a better position to win them.
Andy Burnham became Prime Minister on 20th July. PPN 026 was published on 5th August — sixteen days later.
The government’s message is straightforward: the £90bn spent through public contracts every year should create British jobs, develop British skills, and be felt in every postcode. Not as a box-tick. As a measurable, contractual commitment.
What is PPN 026?
PPN 026 is a new Procurement Policy Note published by the Cabinet Office. It replaces PPN 002 as the Social Value Model for central government procurement — and it applies to procurements commenced on or after 1st January 2027.
Until then, either PPN 002 or PPN 026 may be used during the transition period. The detailed guidance, including the full evaluation methodology, is due in autumn 2026.
What’s actually changed?
The model has been simplified – significantly
PPN 002 had five missions, eight policy outcomes, seventeen Model Award Criteria, and thirty-three Standard Reporting Metrics. If that sounds like a lot, it’s because it was.
PPN 026 has two outcomes and six criteria. That’s it.
The two outcomes are:
- Good Jobs – creating or retaining high quality jobs, fair working conditions, and fair pay
- Skills – training and retraining, in-work progression, and building a talent pipeline
Buyers select one relevant outcome per tender. The aim is to make the model more focused, more measurable, and less of a box-ticking exercise.
The weighting has gone up
Under PPN 002, the minimum Social Value weighting was 10% regardless of contract size. Under PPN 026:
- Contracts between £1m and £5m: minimum 10% weighting
- Contracts of £5m or more: minimum 20% weighting
That’s a doubling of the minimum weighting on larger contracts. Social Value has gone from a meaningful criterion to a decisive one.
The threshold has changed
PPN 002 applied from the procurement threshold of £139,688 including VAT. PPN 026 only applies to contracts worth £1m or more. So while the stakes are higher for larger contracts, smaller contracts sit outside the model’s formal scope.
Accountability is harder
Under PPN 026, Social Value commitments should be monitored through contractual KPIs. For contracts of £5m or more, at least one Social Value KPI must be published on the central digital platform and reported on at least once every 12 months. Poor delivery can be taken into account when a supplier bids for future contracts.
This is the part that changes everything. Promising something in a bid and not delivering it is no longer just bad practice — it’s a risk to your future pipeline.
What’s gone from PPN 002?
Quite a lot, actually. PPN 026 is deliberately narrower. The following are no longer in the central government model:
- Environmental commitments (tackling climate change has been removed entirely)
- Supply chain diversity – supporting SMEs, social enterprises and start-ups
- Modern slavery risk management
- Representation of disabled people in the workforce
- Tackling inequality in employment
- Workforce health and wellbeing
This doesn’t mean these things don’t matter. It means they’re no longer scored under the central government Social Value Model. Local authorities and other public sector bodies aren’t required to adopt PPN 026. Many will continue using their own frameworks, and some will keep PPN 002 or their existing approach.
What does this mean for tech suppliers?
If you’re bidding on central government contracts above £1m – this is directly relevant from 1st January 2027. Your Social Value responses need to align to Good Jobs and Skills. Start mapping what you already do against those two outcomes now, before the ITT drops.
If you’re bidding on contracts under £1m or with local authorities – PPN 026 doesn’t apply to you directly. But expect local authorities and other bodies to take note of the direction of travel. The weighting going up, accountability going up, and the model simplifying are all signals of where procurement is heading.
If you’re on frameworks – watch for framework-level updates. Framework owners will need to align their Social Value requirements to PPN 026 for procurements from January 2027. Some may update earlier. Keep an eye on GCA communications.
The accountability change is the one to take seriously – regardless of contract size. If you commit to Social Value in a bid and don’t deliver, it can now follow you into your next opportunity. Make sure your commitments are ones you can actually fulfil.
Good news for SMEs
There’s a genuine question mark over whether removing the SME and supply chain diversity criteria from PPN 026 is a step backwards for smaller suppliers. Those criteria in PPN 002 actively incentivised buyers to consider SMEs in their supply chains.
The government’s response is that lifting the threshold to £1m and focusing the model on jobs and skills makes bidding simpler for smaller firms — and that preliminary market engagement requirements mean contracting authorities still need to consider whether SMEs can participate before setting criteria.
The Federation of Small Businesses welcomed the threshold change. The proof will be in how it plays out in practice from January 2027.
What should you do now?
You don’t need to overhaul your approach immediately – PPN 002 is still in force until the end of 2026. But a few things are worth doing now:
- Read PPN 026. It’s publicly available on GOV.UK and shorter than you’d expect given what it replaces.
- Map your existing Social Value activity to Good Jobs and Skills. Apprenticeships, work placements, skills training, fair pay commitments – if you’re already doing any of this, document it in those terms.
- Review your framework agreements. If you’re on central government frameworks, watch for guidance on how the transition will work.
- Don’t drop your environmental commitments. They may not be in PPN 026, but buyers care – and the Procurement Act 2023 still expects suppliers to demonstrate responsible and sustainable practices.
- Take the KPI requirement seriously. If you’re bidding on contracts above £5m, your Social Value commitments need to be deliverable and measurable. Build that in from the start, not as an afterthought.
The bigger picture
PPN 026 is the clearest signal yet that Social Value in public sector procurement is maturing. The tick-box era is over. What replaces it is fewer commitments, higher weightings, and harder accountability.
For tech suppliers, that’s both a challenge and an opportunity. The suppliers who treat Social Value as a genuine part of how they deliver, rather than something to fill in at the end of a bid, will be well-positioned. The ones who don’t will find it increasingly difficult to compete.
If you’d like to talk through what PPN 026 means for your bids specifically, book a call with our team. We’re helping suppliers understand the changes and build Social Value approaches that hold up under the new model.
