PPN 026 sets a 20% minimum social-value weighting for £5m contracts

Central government bodies should give social value a minimum 20% weighting for covered contracts worth £5 million or more under PPN 026GOV, applying to procurements commenced from 1 January 2027GOV. Contracts worth at least £1 million but less than £5 million should carry a minimum 10% weightingGOV. The thresholds include VAT.

The policy applies to central government departments, executive agencies and non-departmental public bodies procuring under the Procurement Act 2023. Other public sector authorities may adopt it. Private utilities contracts and contracts primarily for overseas delivery are excluded.GOV Application also depends on selecting relevant, proportionate model criteria that avoid unnecessary supplier burdens, participation barriers and discrimination against treaty-state suppliers.

For the purposes of PPN 026, a procurement commences when its tender notice is published.GOV For earlier procurements under the Act, bodies are encouraged to transition, but may use the previous model where changing would require disproportionate resources or invalidate earlier market engagement. Detailed guidance is due in autumn 2026.

The percentage normally applies to the total tender score.GOV With absolute evaluation methods, such as Price per Quality Point or a Value for Money index, the relevant 10% or 20% applies instead to the non-price criteria, or overall quality score.GOV Tender documents should include a relevant model outcome and corresponding award criteria, with details of available relevant community programmes from the accompanying bidder resource.

The model focuses on good jobs and skills through six criteria: creating or retaining high-quality jobs, fair working conditions, fair pay, training or retraining, progression in work, and developing a talent pipeline. Procurement teams should research market conditions, including small businesses, voluntary-sector organisations and international bidders, before selecting criteria. Staff should receive relevant training. For frameworks, the PPN calls for assessment at both framework and call-off stages; the Act generally restricts competitive call-off assessment to criteria used in awarding the framework, although these may be refined.

Contract managers should monitor supplier commitments through contractual mechanisms. For contracts of £5 million or more, the PPN says at least one social-value KPI should be set in addition to the statutory KPIs where applicable.GOV The Act’s separate duty to set at least three KPIs starts above £5 millionLegislation, and has exceptions where KPI assessment would be inappropriate and for frameworks, private-utility, concession and light-touch contracts. These statutory exceptions should not be confused with the PPN’s own scope and threshold.

Where KPIs are set under section 52(1), section 71 requires performance assessment and publication at least every twelve months and on termination. The PPN also calls for alternative publication arrangements if its specified KPI publication route does not apply, and says poor social-value performance may inform consideration of exclusion grounds for future tenders.

The policy and legal framework are PPN 026, particularly paragraphs 4–18 and Annex A, and the Procurement Act 2023, sections 12, 23, 46, 52, 71 and 90.