Andy Burnham became Prime Minister on 20 July 2026, replacing Keir Starmer and setting out an agenda centred on devolution, reindustrialisation, public control and growth across every part of the country.
For businesses supplying the public sector, a change in Prime Minister does not rewrite the procurement landscape overnight. The Procurement Act 2023 remains in place, existing frameworks continue to operate and contracting authorities still need to run fair, transparent and commercially robust procurement processes.
However, the first few weeks of the new government have already given suppliers a clearer picture of where priorities are changing. Public procurement is being positioned more explicitly as a tool for creating jobs, developing skills, strengthening British industry and directing investment towards local economies. For suppliers, the important question is how these priorities are beginning to affect procurement and what businesses should prepare for next.
Procurement at the forefront
Public procurement featured directly in Burnham’s first speech as Prime Minister. Alongside commitments on devolution, housing and public services, he said the government would seek to reindustrialise Britain and use public procurement to support British industry.
Chancellor John Healey reinforced that message shortly afterwards when setting out five priorities for the Treasury. These included fiscal discipline, growth in every postcode and a commitment to ensuring public procurement supports British jobs, apprenticeships and investment.
That does not mean public bodies can simply favour a supplier because it is British. Procurement decisions remain subject to the Procurement Act, equal treatment requirements and the UK’s international trade obligations.
What is changing is the emphasis placed on the wider outcomes generated through public contracts. For suppliers, this means factors such as jobs, skills, training, workforce conditions, regional delivery and measurable community benefits are likely to become increasingly important alongside the core technical and commercial requirements of the contract.
The new Social Value Model
One of the first concrete procurement changes under the new government has been the publication of PPN 026 and a revised Social Value Model. The policy applies to covered central government procurements worth £1 million or more that commence from 1 January 2027. For contracts worth between £1 million and under £5 million, social value must receive a minimum weighting of 10%. For contracts worth £5 million or more, that minimum rises to 20%.
The revised model is also much more concentrated than previous approaches. Its core areas include:
- creating and retaining good-quality jobs
- fair working conditions and fair pay
- training and retraining
- apprenticeships
- work placements and employment opportunities for people facing barriers to work
The result is a closer connection between procurement, labour-market policy and regional economic growth.
For suppliers, this is significant. A strong social value response will increasingly need to demonstrate not only what a business intends to contribute, but how those commitments relate to the contract, the workforce involved and the needs of the communities where delivery takes place.
There will also be greater scrutiny after contract award. For contracts worth £5 million or more, at least one social value KPI must be established, with performance monitored during delivery.
Focus on devolution
Devolution is another major part of the Burnham government’s programme. The government’s Rewiring the State programme sets out plans to transfer significantly more responsibility from Whitehall to mayors, strategic authorities and local government.
Among the areas identified for greater local control are:
- employment support
- skills and vocational education
- local transport
- housing
- innovation funding
- local energy
- cultural investment
- preventative public services
Local areas will also be able to procure tailored employment support for the long-term unemployed, while mayors are expected to gain greater influence over transport infrastructure, housing investment and regional economic development.
The government wants every part of England to have, or be in the process of creating, a strategic authority by the end of 2027, with strategic authorities operating across England by the end of 2028. For suppliers, the practical implication is that understanding regional buyers may become increasingly important.
Businesses that have historically focused heavily on central government departments may find that more funding, commissioning responsibility and procurement influence sits with combined authorities, mayoral strategic authorities and their local partners.
This makes regional pipeline monitoring increasingly valuable. Suppliers should pay attention not only to live tender notices, but also to local growth plans, market engagement exercises, investment programmes and forward procurement pipelines.
Local delivery evidence
A greater focus on regional growth does not mean that suppliers necessarily need an existing office or workforce in every area where they bid. What matters is being able to demonstrate a credible approach to local delivery.
Depending on the contract, buyers may increasingly be interested in how suppliers intend to:
- create or retain employment in the relevant area
- develop local skills
- offer apprenticeships or work placements
- engage SMEs within the supply chain
- work with local colleges, charities and community organisations
- understand regional labour-market challenges
- deliver measurable benefits over the life of the contract
These commitments need to be realistic. Overpromising jobs, apprenticeships or community activity may help nobody if the commitments cannot subsequently be delivered. With greater emphasis on contract KPIs and performance reporting, suppliers should ensure that the teams developing social value commitments involve colleagues who will ultimately be responsible for delivery. This is particularly important for larger contracts where social value may now represent a substantial part of the overall evaluation.
Housing and infrastructure remain key areas to watch
Burnham’s background in Greater Manchester made housing, transport and infrastructure obvious areas to watch when he first emerged as a potential Prime Minister. His government has now provided more detail about how those priorities could be delivered.
The Rewiring the State programme includes proposals to give local leaders greater control over commuter rail, locally funded transport schemes, affordable housing investment and local infrastructure. Mayors are also expected to receive greater powers to support council house building and housing improvement programmes, while public development corporations could play a larger role in housing and infrastructure delivery.
This could create opportunities across a broad supply chain, including:
- construction and civil engineering
- professional and technical consultancy
- property maintenance and retrofit
- transport
- energy
- digital infrastructure
- employment and skills services
Suppliers in these markets should increasingly monitor regional investment plans alongside traditional central government opportunities.
Procurement and public control
Burnham has repeatedly spoken about stronger public control of essential services, including transport, housing, energy and water.
For private sector suppliers, this should not automatically be interpreted as a reduction in opportunity. Public ownership and public control still require extensive external supply chains. Public bodies buy construction services, technology, professional advice, maintenance, equipment, training, facilities management and many other specialist services.
The procurement model may change, and some outsourced service contracts may be reviewed or brought back in-house. However, new public delivery structures can themselves create significant demand for goods, works and specialist support. The important task for suppliers is to understand how their market is evolving rather than assuming that a shift towards public control necessarily removes commercial opportunity.
Value for money will remain critical
The emphasis on investment and regional growth sits alongside a continued commitment to fiscal discipline. Chancellor John Healey has made clear that the government intends to operate within its fiscal rules, while Burnham has also said that his programme will need to work within those constraints.
That matters for suppliers. Buyers may be asked to deliver more ambitious economic and social outcomes through procurement, but they will still need to demonstrate affordability and value for money. Successful bids will therefore need to balance wider benefits with a strong core commercial proposition.
Suppliers should be prepared to demonstrate:
- competitive and sustainable pricing
- whole-life value
- clear management of delivery risk
- resilience within the supply chain
- realistic mobilisation plans
- measurable social value
- evidence of previous successful delivery
Policy alignment can strengthen a bid, but it cannot compensate for a weak solution.
New opportunities and expectations for SMEs
Smaller businesses are also an important part of the government’s procurement agenda. The new Social Value Model only applies to covered central government contracts worth £1 million or more. Raising the threshold is intended in part to reduce unnecessary procurement burdens on smaller businesses competing for lower-value contracts. The previous government's SME spend targets, meanwhile, aren't disappearing.
At the same time, the wider focus on regional growth, local employment and resilient supply chains could create further opportunities for SMEs. Smaller suppliers may have advantages when they can demonstrate established local workforces, close relationships with communities, responsive service delivery or specialist regional expertise.
However, SMEs bidding for larger contracts will still need to treat social value seriously. Where 20% of the available score is attached to social value, bidders cannot afford to rely on generic statements about being a local employer or supporting the community.
Defence and strategic procurement
Defence, security and industrial resilience also remain important areas for suppliers. The government has linked its wider approach to “backing Britain” with sectors including defence, energy, transport, AI and technology.
Existing reforms around national security procurement also remain relevant, including PPN 025 and the national security provisions within the Procurement Act.
For suppliers operating in strategically important sectors, government purchasing decisions are therefore likely to be viewed increasingly through several lenses at once: value for money, resilience, national capability, security, jobs and long-term economic benefit. This could create opportunities for both major contractors and smaller businesses within their supply chains.
What suppliers should do now
The policy picture will continue to develop over the coming months. Burnham has said that a wider 10-year plan for Britain will follow, while further guidance supporting PPN 026 is expected before the new Social Value Model takes effect in January 2027.
Suppliers don't need to redesign their entire bid strategy in response to every government announcement. There are, however, several sensible steps businesses can take now.
- Review your bid library and assess whether existing evidence around jobs, skills, apprenticeships, local supply chains and community benefits is specific and measurable.
- Look at where your strongest regional credentials sit. This might include existing staff, supply-chain relationships, customers, recruitment pipelines, colleges or community partners.
- Strengthen your approach to social value delivery as well as bid writing. Commitments made during a tender increasingly need to be tracked throughout the contract.
- Monitor regional pipelines and early market engagement, particularly if you work in transport, housing, construction, energy, employment support or other areas likely to be affected by greater devolution.
- Finally, keep the fundamentals of bidding in focus. Buyers still need suppliers that can demonstrate relevant experience, a strong delivery model, sensible pricing and confidence that the contract will be delivered successfully.
Preparing for the next phase of public procurement
The first weeks of the Burnham government have provided a much clearer indication of how public procurement fits into its wider economic programme. The direction is towards greater use of procurement to support jobs and skills, stronger regional decision-making and closer links between public spending and economic development.
There is still significant detail to come. The wider 10-year plan, future fiscal decisions and detailed guidance supporting PPN 026 could all shape how these policies work in practice. For suppliers, that makes it important to monitor both procurement reform and the broader policy environment around it.
Thornton & Lowe works with businesses bidding across central government, local government, healthcare, housing, infrastructure and other public sector markets. If you need support assessing upcoming opportunities, strengthening your bid strategy or preparing for changing evaluation requirements, get in touch with our team.
