From 1 January 2027, a new Social Value Model will apply to central government contracts. PPN 026, published by the Cabinet Office on 5 August 2026, narrows the model right down to two outcomes: Good Jobs and Skills. It replaces PPN 002, a model that only became mandatory in October 2025. In its own announcement, government describes the previous approach as a “tick box exercise” and frames this change as a way to make sure the £90bn spent on public contracts each year is felt directly in local jobs, skills and apprenticeships.

The new model applies to central government departments, executive agencies and non-departmental public bodies, for contracts valued at £1m or above. Local government and the wider public sector aren’t required to adopt it, though they may choose to. Technical guidance and sub-criteria follow in autumn 2026.

What’s changing

PPN 002 offered a broad menu of five Social Value Themes and eight Policy Outcomes, spanning fair work, wellbeing, environmental sustainability, innovation and diversity. PPN 026 narrows this to two outcomes, delivered through six Model Award Criteria:

  • Good Jobs: fair pay, fair working conditions, and creating or retaining quality jobs
  • Skills: training, retraining, in-work progression and talent pipelines from underserved communities

The government’s definition of social value has changed to match: taking account of how a supplier will work for communities to provide good British jobs, skills and opportunities in every postcode.

Minimum weightings increase too, and are now tiered by contract value: 10% for contracts between £1m and £5m, rising to 20% for contracts of £5m or more. Social value also becomes more contractual. Contracts of £5m or more require at least one social value KPI, published centrally and reported at least annually, and poor delivery can be grounds for excluding a supplier from future bids.

What this gets right

Accountability for delivery is stronger. A higher weighting gives social value more influence over who wins a contract, and mandatory, publicly reported KPIs mean commitments carry real consequences rather than sitting in a bid document unchecked.

Large contractors including AMEY, Sopra Steria, Serco and Kier were quoted in the government’s announcement supporting the new focus, and the Federation of Small Businesses has welcomed a related change: raising the threshold to £1m and dropping the wider requirements below it, on the basis that this removes a documentation burden many smaller firms found hardest to navigate.

What could get lost 

That’s a fair claim for contracts below the threshold. But it’s a different question to what happens for the contracts that remain in scope, and that’s where our concern sits.

Narrowing the model to jobs and skills pushes aside broader themes such as community impact, equality, wellbeing and the environment, areas many organisations have spent years building capability and investment in. Within the contracts still covered, the challenge isn’t just headcount, though it’s true that adding a new role is a much bigger step for a small business than for a large contractor absorbing a hire into an existing workforce. The deeper issue is what gets left out when employment becomes the main lever for social value. Larger organisations often support communities well beyond job creation, in ways that require scale: significant funding, national supply chains, or big employability programmes. Smaller and local organisations tend to support communities differently, through close relationships, detailed local knowledge and tailored, often more complex responses to what a place or community actually needs. When the model narrows to jobs and skills, it favours the kind of social value that’s easiest to scale and count, and quietly closes off some of the more interesting, harder to standardise contributions that smaller organisations are often best placed to make.

There’s also a second, quieter change worth flagging. Today, the social value model applies to all central government contracts above roughly £140,000. From January 2027, that threshold rises to £1m, meaning a whole tier of contracts between £140,000 and £1m will no longer carry any mandated social value requirement at all. Nothing stops a buying team from choosing to include it below that line, but nothing requires them to either, and unscored, voluntary social value tends not to survive contact with a busy procurement process. This only applies to central government, its executive agencies and non-departmental public bodies though; local government, the NHS and the wider public sector aren’t affected, so a good deal of smaller-scale social value delivery through local authorities carries on as it is.

This isn’t a view shared universally. Practitioners and sector bodies, including Social Value Portal, have pushed back on the narrowing, following a June 2025 consultation in which many reportedly raised similar concerns, while other organisations see this as a welcome sharpening of focus rather than a loss.

What’s still unknown

A lot rests on guidance still to come, due in autumn 2026:

  • A ‘List of Community Programmes’ for bidders is referenced in the PPN but not yet published, so it’s too early to say how much room it leaves for community-focused delivery within the new model.
  • Target cohorts, including NEETs, care leavers and people transitioning from education to employment, are named but not yet defined in detail.
  • Sub-criteria and evaluation methodology are still to be set out, so practical application can’t be finalised yet.

Many organisations have spent years investing in programmes that support people, places and the planet. It will be interesting to see how, or whether, these efforts find a place within the new model, particularly once that guidance lands.

Is this the right direction for social value, or are we narrowing the definition of impact too far?