PPN 025 (Procurement Policy Note 025) is a Cabinet Office policy, issued in June 2026, that requires Central Government departments to consider national security implications before procuring in four critical sectors: artificial intelligence, energy infrastructure, shipbuilding, and steel. In-scope buyers must identify relevant procurements in their pipeline, engage with government-appointed Sector Leads before going to market, and consider deploying the national security exemption under the Procurement Act 2023 where justified. PPN 025 applies immediately with no phased implementation date. It applies to Central Government departments, their Executive Agencies, and Non-Departmental Public Bodies. Private utilities are strongly encouraged to follow it for energy infrastructure procurements.
PPN 025 requires Central Government departments to identify procurements in four critical sectors, engage with government-appointed Sector Leads before going to market, and consider whether the national security exemption in the Procurement Act 2023 applies. The four sectors are artificial intelligence, energy infrastructure, shipbuilding, and steel.
The Cabinet Office published PPN 025 on 19 June 2026. Unlike most procurement policy notes, it comes into force immediately, meaning there is no future deadline to work towards. If you supply into any of the four sectors, the landscape changed this week.
The policy is rooted in the government's National Security Strategy 2025, which argues the UK is entering what the Cabinet Office calls "a new era of radical uncertainty." Its response is to use public procurement more deliberately, not just to buy goods and services at the best price, but to actively shape the markets the UK depends on for its long-term security.
For suppliers, that means the question buyers ask is changing. Capability and price still matter, but government now also wants to know: where does your supply chain come from, how resilient is it, and does your offer strengthen UK capability rather than deepen strategic dependency?
The policy is not a blanket restriction on who can bid. It is a framework for buyers to assess national security risk at the planning stage, before a commercial strategy is finalised. The national security exemption, which can dis-apply some or all of the Procurement Act's competition and transparency requirements, can only be used where there is a clear, evidence-based justification on a case-by-case basis. It is not automatic, and it is not a shortcut.
PPN 025 applies with immediate effect to Central Government departments, their Executive Agencies, and Non-Departmental Public Bodies
Private utilities are strongly encouraged to apply the guidance for energy infrastructure procurements and to engage with the relevant Sector Lead. Other public sector contracting authorities, including local government and NHS bodies, can consider the guidance voluntarily, particularly for high-value or strategically significant procurements.
Each of the four critical sectors has a designated government lead responsible for coordinating procurement activity across Central Government. In-scope buyers are expected to engage with the relevant Sector Lead before launching procurements that fall within the defined thresholds.
The four Sector Leads are:
Sector Leads can provide strategic context, market intelligence, and cross-government coordination. The full guidance makes clear that departments should understand the consequences of not engaging, including the risk of procurement approaches that inadvertently weaken domestic capability or increase strategic dependency.
The thresholds vary by sector and are set by the Sector Leads, so they may change over time. As of June 2026:
Artificial Intelligence: Procurements of £5 million or more substantially related to AI hardware (chips, data centres, networking, power, cooling), AI embedded in Critical National Infrastructure, or AI tools handling sensitive personal data such as health, financial or biometric records. Values should include estimates of consumption-based spend over the contract's expected life.
Energy Infrastructure: Procurements covering electrical equipment including cables, transformers, switchgear and control systems, as well as generation assets including offshore wind, nuclear, solar, CCUS, hydrogen and heat pumps.
Shipbuilding: Procurements of over £1 million related to shipbuilding and maritime technology, including naval architecture, ship design, marine engineering, autonomy, digitalisation and AI in maritime applications. Departments are also encouraged to engage the National Shipbuilding Office for contracts below £1 million.
Steel: Procurements of £10 million or more, or any procurement expected to require more than 500 tonnes of steel.
For the full sector-specific requirements, read Annex A of the guidance.
Of the four sectors, AI and energy infrastructure carry the broadest supplier implications and the largest existing spend.
Stotles data shows that data, AI and automation has become the highest-value tech procurement category across Central and Local Government, with £17.29bn in total contract value recorded between 2022 and 2025. The figures skew heavily towards Central Government, which historically controls the vast majority of total tech contract value.
PPN 025 matters in this context because AI supply chains are heavily concentrated. The guidance explicitly acknowledges this, noting that the UK has strengths in hardware innovation but that supply chain dependencies are "highly concentrated, with advanced hardware shaped by a small number of global suppliers." That concentration is precisely what the policy is trying to address.
For energy infrastructure, the Sector Lead is already focusing on specific categories: cabling, control and protection systems, and transformers. Major forthcoming projects have been identified as targets for early engagement. If you supply into these categories, waiting for a tender notice is too late.
Related reading
PPN 024 explained: what the Public Interest Test and Insourcing Strategy means for suppliers
PPN 025 asks buyers to think differently about what value for money means.
The guidance references HM Treasury's updated Green Book, which frames value for money as a balanced judgement, not just cost, but strategic alignment, deliverability, and risk. Buyers are being told that focusing solely on short-term price or operational preference could expose UK national security interests to avoidable risk.
In practice, procurement teams in scope should:
The guidance also makes clear that national security is now being interpreted more broadly than defence alone. Supply chain resilience, dependency on overseas suppliers, and continuity of critical capabilities are all relevant considerations. Read the full PPN 025 guidance for the complete recommended steps.
