Procurement in a Nutshell: Guidance on using Procurement Policy Note 026: The Social Value Model

What is changing?

The new Social Value Model defines social value as “taking account of how a supplier will work for our communities to provide good British jobs, skills and opportunities in every postcode”.

Which procurements are affected?

From 1 January 2027, PPN 026 should be applied to new covered procurements worth £1 million or more. If you award a contract using the framework set up before this date, you may need to consider the PPN in use at the time the framework was awarded.

For frameworks procured:

• before 1 January 2027 but on or after 24 February 2025, use PPN 02
• before 24 February 2025 but on or after 1 January 2021, use PPN 06/20

PPN 026 only applies to central government departments, their executive agencies and non-departmental public bodies. Such bodies are referred to as ‘in-scope organisations’. However, other public sector contracting authorities are still encouraged to adopt the approach set out in this PPN.

Key focus on Good jobs and Skills

PPN 026 sets out the government’s social value priorities for procurement.

Good jobs

• Create high-quality jobs.
• Fair working conditions.
• Fair pay.

Skills

• Training / Retraining.
• In-work progression.
• Talent Pipeline.

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Increased social value weighting

One of the most significant changes is the introduction of minimum social value weightings:

You should ensure that the Social Value Model question is weighted correctly as part of the overall score available for suppliers bidding on a contract. If you use an absolute methodology such as Price per Quality Point (PQP) or Value for Money index, this will still be either 10% or 20%.

Contracts must also meet the relevant public contracts threshold. For example, a works contract valued at £4m is not in-scope because it is below the public contract threshold for works.

Key considerations when selecting social value requirements

Contracting authorities are expected to:

• Assess market capability.
• Conduct preliminary market engagement.
• Ensure social value requirements are relevant and proportionate.
• Avoid discriminating against treaty-state suppliers.

The guidance stresses that social value commitments must be linked to the subject matter of the contract and should not create unnecessary barriers for SMEs, VCSEs or overseas suppliers.

For further information please contact Tim Care or Melanie Pears in our Public Sector team.