PPN 026 explained: what the new Social Value Model means for suppliers

Quick answer

PPN 026 (Procurement Policy Note 026) is a Cabinet Office policy, published on 5 August 2026, that sets a new Social Value Model for central government contracts worth £1 million or more. From 1 January 2027, in-scope buyers must score social value on a jobs-and-skills model, weighted at least 10% for contracts up to £5 million and at least 20% at £5 million and above.

It replaces the previous edition of the Social Value Model for central government, and it changes two things at once. Social value on major contracts carries more weight, and the model itself is narrower, built around good jobs and skills for people in your community.

If you bid for this work, that changes how your social value response is scored. On the largest contracts, it also adds a delivery risk you will be held to long after award.

What is PPN 026?

PPN 026 is a Cabinet Office Procurement Policy Note that sets the Social Value Model central government must use when scoring supplier bids. It defines social value as taking account of how a supplier will provide good British jobs, skills and opportunities in every postcode, and it sits under the Procurement Act 2023.

The policy applies to what it calls "in-scope organisations": central government departments, their executive agencies and non-departmental public bodies. Other public sector buyers can choose to adopt the approach, but they are not required to.

Which contracts does PPN 026 apply to?

PPN 026 applies to central government procurements valued at £1 million or more, including VAT.

A few exclusions are worth knowing. The policy does not apply to private utilities contracts, or to contracts whose primary purpose is overseas delivery, such as work for embassies. For frameworks, social value is assessed at both the framework and call-off stage, with detailed guidance due in autumn 2026.

How much social value weighting do you need under PPN 026?

Social value must carry a minimum 10% weighting for contracts valued at £1 million up to £5 million, and a minimum 20% weighting for contracts valued at £5 million or more.

That weighting is a share of the total score available to tenders. Where buyers use absolute methods such as Price per Quality Point or a Value for Money index, the 10% or 20% applies to the non-price quality score instead. Buyers can apply a higher weighting where it is relevant and proportionate to the contract.

What are the two outcomes and six award criteria?

The new model has two outcomes, Good Jobs and Skills, split across six award criteria. Outcome 1 covers creating and retaining high quality jobs, fair working conditions, and fair pay. Outcome 2 covers training and retraining, in-work progression, and building a talent pipeline.

The model targets people who face barriers to employment. Future guidance will focus on cohorts including those not in employment, education or training, people moving from education into work, people with a long-term health condition or disability, and care leavers.

What happens if you miss a social value KPI?

For contracts of £5 million or more, buyers must set at least one social value KPI, and poor performance against it can be taken into account as grounds to exclude a supplier from future tenders.

That KPI sits on top of the three or more KPIs already required under section 52 of the Procurement Act 2023. KPIs are published on the central digital platform and reported at least once every 12 months through the contract performance notice. A social value commitment you make in a bid becomes a measured, published part of how you deliver the contract.

How is PPN 026 different from the last Social Value Model?

PPN 026 narrows the model to jobs and skills and, for the first time, raises the weighting to 20% on the largest central government contracts.

When the Social Value Model was last updated under PPN 002 in October 2025, social value carried a minimum 10% weighting. PPN 026 keeps that floor for contracts up to £5 million and doubles it to 20% above that. It also strips the model back to two outcomes: good jobs and skills.

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What does PPN 026 mean for suppliers?

Your social value response now has to speak the language of jobs and skills, and on larger contracts it carries more weight and more risk.

The practical steps to take before January 2027:

• Re-map your social value offer to the six award criteria, so your response speaks to jobs, pay, conditions, training, progression and talent pipelines rather than older social value themes.
• For any contract likely to reach £5 million, plan for a mandatory, published social value KPI that you will be measured against after award.
• Build evidence you can deliver locally, since the model rewards jobs, skills and opportunities tied to specific communities and cohorts.
• Watch for the autumn 2026 guidance, which adds the sub-criteria, the community programmes list, and detail on target cohorts.
• Track central government tenders early, so you can shape your social value response before the ITT lands rather than after.

Stotles tracks pre-tender notices, pipeline signals and contract expiries across central government, so you can see a social value requirement coming and prepare a response that scores. Join a strategy call to see how it works.

FAQ

When does PPN 026 come into force?

PPN 026 applies from 1 January 2027 to any in-scope procurement commenced on or after that date, with a procurement counted as commenced when the tender notice is published. Practitioner guidance follows in autumn 2026. Buyers may transition earlier Procurement Act 2023 procurements to the new model before then.

Does PPN 026 apply to local government or the NHS?

No. PPN 026 applies to central government in-scope organisations, meaning departments, their executive agencies and non-departmental public bodies. Other public sector buyers, including local government and the NHS, may choose to adopt the approach, but they are not required to.

What social value weighting does PPN 026 require?

Social value must carry a minimum 10% weighting for contracts from £1 million up to £5 million, and a minimum 20% weighting for contracts of £5 million or more, both including VAT. Buyers can apply a higher weighting where it is relevant and proportionate. Where absolute scoring methods are used, the weighting applies to the non-price quality score.

What are the six social value award criteria under PPN 026?

The six criteria sit under two outcomes. Good Jobs covers creating and retaining high quality jobs, fair working conditions, and fair pay. Skills covers training and retraining, in-work progression, and building a talent pipeline. Each rewards suppliers who deliver measurable benefits for people facing barriers to employment.

Can poor social value performance get a supplier excluded from future work?

Yes. For contracts of £5 million or more, buyers must set at least one social value KPI. Evidence of poor performance against a social value KPI can be taken into account when considering whether there are grounds to exclude a supplier from bidding for future tenders.