The Cabinet Office has replaced the Social Value Model for central government. From 1 January 2027, contracts of £5 million and above carry a minimum 20 per cent weighting for social value, scored on two outcomes, good jobs and skills. The bids being planned now are the ones it will decide.
Procurement Policy Note 026, published by the Cabinet Office on 5 August 2026, is the biggest change to how central government scores social value since the model was introduced in 2020. It applies to central government departments, their executive agencies and non-departmental public bodies, for covered procurements with a total contract value of £1 million including VAT or above, commenced under the Procurement Act 2023 on or after 1 January 2027. Authorities may move to it earlier, and may stay on the previous edition during the transition where switching would need disproportionate resources or would invalidate market engagement already done.
Two numbers matter. Contracts of £1 million and above, but below £5 million, carry a minimum 10 per cent weighting for social value. Contracts of £5 million and above carry a minimum 20 per cent. Under the previous model, PPN 002 of February 2025, the floor was 10 per cent whatever the value. On the largest central government contracts, a fifth of the score now sits on how a supplier will provide, in the PPN’s words, good British jobs, skills and opportunities.
What changes from the 2025 model?
| PPN 002, February 2025 | PPN 026, from 1 January 2027 | |
|---|---|---|
| Value threshold | The goods and services threshold, £139,688 including VAT | £1 million total contract value including VAT |
| Minimum weighting | 10 per cent | 10 per cent from £1 million; 20 per cent from £5 million |
| Structure | 5 missions, 8 policy outcomes, 17 model award criteria, 33 standard reporting metrics | 2 outcomes, 6 model award criteria |
| What is scored | Economic growth, clean energy, safer streets, opportunity, the NHS | Good jobs and skills |
| After award | Standard reporting metrics | At least one social value KPI on contracts of £5 million and above, set, published and reported |
| Exclusions | Private utilities contracts, and contracts whose primary purpose is overseas delivery |
Sources: Cabinet Office, PPN 026: The Social Value Model, 5 August 2026; Cabinet Office, PPN 002: The Social Value Model, February 2025; Thrive, PPN 026 vs PPN 002, 11 August 2026.
The model is narrower and heavier. Fewer things score, and the things that score count for more.
What will evaluators actually score?
The authority selects a delivery outcome from the model and attaches its award criteria to the tender. There are six.
Outcome 1, good jobs. Criterion 1a rewards suppliers who create or retain jobs in the relevant area, adapt recruitment and retention so that communities can access and keep those jobs, and create jobs in innovative, high-growth sectors. Criterion 1b rewards working conditions above the statutory minimum and support for people facing barriers to staying in work. Criterion 1c rewards pay above the national minimum wage and progressive remuneration policies.
Outcome 2, skills. Criterion 2a rewards training and retraining that addresses known skills shortages, co-designed with the community or cohort concerned. Criterion 2b rewards in-work progression for the contract workforce, tied to retention and service quality. Criterion 2c rewards a talent pipeline: pre-work training, placements, apprenticeships and other routes into work, particularly in communities with multiple indices of deprivation.
Detailed sub-criteria, the evaluation approach, a list of community programmes that authorities will attach to tenders, and definitions of the target cohorts are all promised in guidance due in autumn 2026. Commentary on the draft direction points to young people not in education, employment or training, care leavers, disabled people and school-to-work transitions. Source: Gowling WLG, PPN 026 and the new Social Value Model, 19 August 2026.
Why does this matter more for technology and services suppliers?
Because the old model gave a software or services company somewhere else to score. Carbon reduction, wellbeing and community engagement rewarded a supplier whose contract workforce was small, remote or already in place. The new model does not. Every one of the six criteria is about people employed on or around the contract: who is hired, where, on what terms, and how they are trained and progressed.
At 20 per cent, that is not a tie-breaker. On a contract scored out of 100, a bidder with full marks on social value against a rival on half marks gains 10 points, which is more than the quality gap between most shortlisted bids. A technically stronger bid with a generic social value section will lose to a competent bid with a specific, evidenced workforce plan.
There is a second-order effect. On contracts of £5 million and above, at least one social value KPI is set, published on the central digital platform and reported at least annually under the Act’s contract performance duties. Commitments made to win become commitments measured in public, and the Act allows poor performance to be taken into account in future procurements. Social value promises that a bid team invented on the final weekend now follow the company for the life of the contract.
What does it mean for international companies?
The exclusion for contracts whose primary purpose is overseas delivery is narrow. A UK contract delivered from a UK team, with an overseas parent, is fully in scope. So is a contract delivered partly offshore, and the criteria will score the UK element.
For an international supplier, the practical questions are the ones we work through in UK market entry programmes: which UK entity contracts and employs; where the delivery team sits; whether apprenticeships, placements or partnerships with UK colleges and anchor institutions are realistic at the contract’s scale; which UK subcontractors and SMEs carry part of the delivery; and what the group’s pay, conditions and progression policies look like when translated into the model’s terms. A supplier that answers those before the tender notice can write a credible 20 per cent. One that answers them in the tender window cannot.
What should bidders do before January?
First, identify which contracts this reaches. Pipeline notices give up to 18 months’ forward view of central government procurements, and a contract of £1 million or more starting in 2027 will almost certainly be scored under the new model.
Second, build the offer against the six criteria, not against last year’s social value response. Each commitment needs a number, a date, a cohort and an owner, because on larger contracts it will become a KPI.
Third, collect the evidence that already exists. Pay above the statutory minimum, existing training spend, apprenticeship numbers and retention rates score today if they are presented against the criteria.
Fourth, plan for both stages. Frameworks and call-offs are both assessed, with detail on how in the autumn guidance.
Fifth, read the guidance when it lands, and adjust before the first January tender rather than during it. Our bid leadership work through the autumn is being built around exactly this sequence.
And contracting authorities outside central government?
The PPN binds central government only. Local authorities, housing associations, NHS bodies, police and universities keep their own social value policies, and the PPN says they may wish to adopt the approach. Suppliers bidding across the sector should expect a mix of models through 2027. Authorities reviewing their contract procedure rules have a decision to make now: adopt the two-outcome model, keep the current approach, or set out when each applies. Whichever they choose, the weighting, the criteria and the KPI treatment should be stated in the rules and the tender documents, so that evaluation can be defended if challenged.
Questions bidders are asking
Does PPN 026 apply to local authorities, NHS bodies or housing associations?
No. It applies only to central government departments, their executive agencies and non-departmental public bodies. Other contracting authorities may adopt it voluntarily, and the PPN says they may wish to.
When does the new Social Value Model start?
In-scope organisations apply it to procurements commenced on or after 1 January 2027. They may use it earlier, and may stay on PPN 002 during the transition where switching would need disproportionate resources or invalidate market engagement already carried out.
What is the minimum weighting for social value under PPN 026?
A minimum of 10 per cent for contracts of £1 million and above but below £5 million, and a minimum of 20 per cent for contracts of £5 million and above, both measured on total contract value including VAT. Contracts below £1 million are outside the PPN.
Does it apply to overseas suppliers?
Yes, where the contract is delivered in the UK. The only exclusion is for contracts whose primary purpose is overseas delivery. An international supplier bidding for UK delivery is scored on the same criteria as a UK company.
What happens to social value commitments after award?
The PPN requires them to be monitored and measured through contractual mechanisms such as KPIs. On contracts of £5 million and above, at least one social value KPI is set, published and reported under the Procurement Act 2023's performance duties, and poor performance can count against a supplier in later procurements.
Sources: Cabinet Office, PPN 026: The Social Value Model, 5 August 2026; Cabinet Office, PPN 002: The Social Value Model, February 2025; Procurement Act 2023, sections 52 and 71 and Schedule 7; Gowling WLG, 19 August 2026; Stotles, 5 August 2026; Thrive, 11 August 2026.