Why the new Social Value Model demands more than good intentions

PPN 026 narrows the formal Social Value Model, but it also raises the stakes.

The Government has published a new Social Value Model that significantly changes what social value will mean in central government procurement.

Published on 5 August 2026, PPN 026: The Social Value Model focuses the model on two connected outcomes: good jobs and skills. It aims to use public procurement to provide good British jobs, skills and opportunities in every postcode, particularly for communities and people facing barriers to employment.

On the surface, this may look like a simpler model. In practice, it could demand a much more mature approach from suppliers.

Organisations will no longer be able to treat social value as a collection of loosely connected initiatives added to a bid. To deliver credible commitments around inclusive employment, training and progression, suppliers will need the relationships, processes, culture and delivery infrastructure to make those commitments work.

In other words, PPN 026 has the potential to move social value further away from box-ticking and towards genuine, systemic change.

What is changing?

The new model applies to central government departments, their executive agencies and non-departmental public bodies. Other public sector contracting authorities may choose to adopt the same approach, but they are not required to do so by the PPN. In-scope organisations will apply the model to procurements commencing on or after 1 January 2027, and contracting authorities are encouraged to transition earlier where appropriate.

The minimum social value weighting has changed, and will depend on the contract value:

• Contracts worth £1 million or more but less than £5 million must apply a minimum social value weighting of 10%.

• Contracts worth £5 million or more must apply a minimum social value weighting of 20%.

Doubling the minimum weighting for larger contracts gives social value much greater influence over procurement outcomes. For bidders, it means that the quality and credibility of their approach to jobs and skills will have a much more material effect on whether they win.

A much sharper focus on jobs and skills

The model has been streamlined around two outcomes.

Outcome 1: Good jobs

The first outcome focuses on employment that offers fair pay and good working conditions, while helping people to find work, remain in employment and progress in their careers.

Its three award criteria cover:

• Creating and retaining high-quality jobs

• Providing fair working conditions

• Providing fair pay

Suppliers may receive recognition for creating or retaining jobs in the relevant area, adapting recruitment and retention processes so that communities can access employment, and creating jobs in innovative or high-growth sectors. The model also encourages suppliers to go beyond statutory minimum requirements through supportive working practices and pay packages that exceed the National Minimum Wage.

This is important because the model is not solely concerned with the number of jobs created. It also looks at whether those jobs are accessible, secure, fairly rewarded and designed to help people stay in work.

Outcome 2: Skills

The second outcome focuses on addressing skills shortages and creating development opportunities, particularly for people who face barriers to employment or find it difficult to participate in the labour market.

Its three award criteria cover:

• Training and retraining

• In-work progression

• Developing a talent pipeline

Relevant activities could include apprenticeships, work placements, pre-employment training, workplace adaptations and development opportunities that help people move into higher-paid roles. The model also places emphasis on addressing identified skills shortages and building talent pipelines for innovative and high-growth industries.

Future guidance is expected to identify target groups including young people who are not in employment, education or training, people moving from education into employment, people with long-term health conditions or disabilities, care leavers and other communities facing barriers to work. Target skills will be informed by government skills strategies, with skills for clean energy jobs given as an example.

Local relevance will matter

One of the most significant features of PPN 026 is its emphasis on communities.

The model encourages suppliers to identify potential talent within relevant communities, particularly areas experiencing multiple deprivation, and to work with communities, anchor institutions or representative organisations to co-design appropriate opportunities. Contracting authorities are also expected to provide bidders with details of relevant community programmes where these are available.

This should help connect national procurement expenditure to local economic and labour market priorities.

However, “local” social value should not mean simply putting a local postcode into a generic delivery plan. Different communities face different employment barriers, skills shortages and economic conditions. An effective programme will need to begin with an understanding of the area, the people who are currently excluded from opportunity and the support they need to enter and remain in work.

Suppliers will therefore need to show not only what they will deliver, but also why it is needed in that place, who helped shape it and how it connects to the contract.

Why delivery infrastructure will be the real differentiator

This is where the new model becomes more than a procurement change.

It is relatively easy to write that an organisation will create jobs, provide work placements or recruit people facing barriers to employment. Delivering these commitments successfully is much harder.

A credible employment and skills programme would require:

• Established relationships with community organisations, education providers, local authorities and employment support services

• Specialist recruitment partners that understand the barriers faced by different groups

• Inclusive job descriptions, application processes and assessment methods

• Hiring managers who understand inclusive recruitment and are prepared to consider non-traditional candidates

• Appropriate workplace adjustments and flexible working arrangements

• Structured induction, training, mentoring and pastoral support

• Clear progression routes that enable people to build skills and move into more secure or better-paid work

• Data systems that can track participation, completion, employment, retention and progression

• Senior leadership support and clear operational ownership

These are not arrangements that can always be created after a contract has been awarded. Relationships need trust. Recruitment processes need testing. Managers need training. Support needs to be properly resourced. Measurement systems need to be designed before delivery begins.

This makes the organisation’s underlying operating model increasingly important. A strong social value response will need to be backed by evidence that the supplier can turn its commitments into sustained outcomes.

From activities to outcomes

PPN 026 also strengthens the link between promises made during procurement and performance during contract delivery.

All social value commitments should be monitored through contractual mechanisms such as key performance indicators. Where a supplier commits to supporting a programme included in the forthcoming List of Community Programmes, the KPI should monitor delivery of that programme.

For contracts worth £5 million or more, at least one social value KPI must be set in addition to the three or more KPIs required under section 52(1) of the Procurement Act 2023. Evidence of poor performance against social value KPIs may also be considered when determining whether there are grounds to exclude a supplier from future tenders.

This changes the risk calculation for bidders.

A commitment should no longer be viewed only as a way of gaining evaluation points. It is a contractual promise that may be monitored, reported publicly and considered in future procurement decisions.

The practical measurement framework will become clearer when the supporting guidance and detailed sub-criteria are published in autumn 2026.

A more strategic role for social value

The new model effectively moves social value closer to workforce planning, recruitment, learning and development, contract management and operational delivery.

It cannot sit solely with the bid team or a single sustainability lead. Human resources may need to redesign recruitment and retention processes. Learning and development may need to create pathways linked to skills shortages. Operational managers will need to host placements, support new recruits and provide evidence. Contract managers will need to monitor delivery. Finance teams may need to understand the cost of commitments before they are approved.

This also means that social value strategy and business strategy should become more closely aligned.

The strongest programmes will not be disconnected charitable activities. They will help suppliers to meet genuine workforce needs while widening access to employment and skills. For example, an organisation facing an ageing workforce or persistent skills shortage could work with local partners to create a supported talent pipeline. Done well, this could provide opportunities for people who might otherwise be excluded while improving the supplier’s long-term workforce resilience.

That is where the model has the potential to become systemically transformational. It encourages suppliers to change how they recruit, train, support, retain and progress people, rather than simply funding an activity at the edge of the business.

What should suppliers do now?

Suppliers do not need to wait until January 2027 to prepare. Useful actions include:

1. Map relevant contracts and opportunities

Identify contracts likely to fall within the £1 million and £5 million thresholds and consider how the increased weightings could affect bid strategy.

2. Review workforce needs

Understand current and future vacancies, difficult-to-fill roles, skills shortages, retention challenges and progression opportunities.

3. Assess local delivery capability

Map existing relationships with local authorities, employment services, voluntary organisations, colleges, universities and community groups in priority contract areas.

4. Review recruitment and employment practices

Examine whether application, assessment, onboarding, workplace adjustment and retention processes are genuinely accessible to people facing barriers to employment.

5. Build support around the opportunity

Consider what training, mentoring, pastoral support and workplace adaptations participants may need to succeed.

6. Clarify governance and accountability

Assign owners across bid, HR, learning and development, operations, contract management and sustainability roles.

7. Test whether commitments are deliverable

Cost proposed activities, confirm operational capacity and agree internal approval processes before commitments enter a tender response.

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Social value is becoming part of how organisations operate

PPN 026 narrows the formal Social Value Model, but it also raises the stakes.

For suppliers, success will depend less on producing a long list of possible initiatives and more on demonstrating a focused, locally relevant and deliverable approach to employment and skills. Organisations will need to understand communities, work with specialist partners, remove barriers within their own systems and support people after they enter the workplace.

The businesses best placed to succeed will be those that already treat social value as part of workforce strategy and operational delivery, not as an appendix to a tender.

The question for suppliers is therefore no longer simply:

“What can we promise in this bid?”

It is:

“Have we built the relationships, culture, processes and infrastructure needed to create lasting opportunity in the communities this contract serves?”

That is a more demanding question. It is also a question that could move social value further from compliance to transformation.

At transformacy, enabling transformation is part of our DNA. We help organisations create lasting impact by providing end-to-end support, from strategy development and social value planning through to winning bids, delivering commitments, measuring outcomes and reporting performance. If you would like to discuss how you can prepare for the new Social Value Model with one of our experts, please book a meeting here.

This article reflects the model published on 5 August 2026. Detailed sub-criteria and guidance is due to be published in autumn 2026.