PPN 026: What the New Social Value Model Means for Suppliers

Social value is changing again for suppliers bidding for central government contracts. From January 2027, PPN 026 introduces a more focused Social Value Model centred on good jobs, skills and opportunities, alongside a higher minimum weighting for larger contracts.

For bid teams, this isn’t simply a case of updating a few policy references. The new model changes the areas suppliers may need to evidence, the commitments worth preparing for and, on major contracts, the importance social value can have within the overall tender score.

What Is PPN 026?

Published on 5 August 2026, PPN 026: The Social Value Model sets out a new approach to social value for relevant central government procurements.

It applies to central government departments, their executive agencies and non-departmental public bodies. The policy covers procurements valued at £1 million or more including VAT that commence on or after 1 January 2027. Other public sector contracting authorities may choose to adopt the approach, but they aren’t automatically required to do so.

That distinction matters. A council, NHS body or housing association may continue to use its own social value framework, the TOM System or another approach. Our wider guide to social value in tenders explains how these different requirements can fit into public procurement.

PPN 026 at a Glance

The headline changes are as follows:

The weighting point is particularly significant. For in-scope contracts worth £5 million or more, social value must account for at least 20% of the total score that can be awarded to tenders, or the equivalent under an alternative evaluation methodology.

Good Jobs and Skills

PPN 026 substantially streamlines the Social Value Model.

Rather than using the broader range of outcomes found in previous versions, the new model is built around two Outcomes: Good Jobs and Skills. Beneath these sit six Model Award Criteria, or MACs.

Good Jobs

The first Outcome covers the quality, accessibility and sustainability of employment created or supported through contract delivery.

• Create and/or retain high-quality jobs focuses on employment opportunities connected with economic growth, skills shortages and access to work. Buyers may consider how suppliers will adapt recruitment and retention approaches to help communities access jobs and how contract delivery can support innovative or high-growth sectors.
• Fair working conditions considers the quality and security of conditions offered to the contract workforce. The model refers to measures that go beyond statutory minimum requirements where relevant, including flexible working, workplace culture and support for people who face barriers to remaining in employment.
• Fair pay looks at the quality of the pay package offered to the contract workforce, including whether suppliers go beyond the statutory National Minimum Wage and use progressive remuneration policies to retain staff.

These criteria make employment practices a much more direct part of social value planning. Bid teams may therefore need much stronger input from HR and operational colleagues than they have relied on previously.

Skills

The second Outcome focuses on addressing skills shortages and improving routes into and through employment.

• Training and retraining can include activity that addresses identified skills gaps or helps people facing barriers to employment gain the skills needed to enter and remain in the workforce. Apprenticeships and work placements are given as examples, but the appropriate intervention will depend on the contract and community need.
• In-work progression considers how suppliers can help members of the contract workforce develop new skills and progress into higher-paid roles. The model also links progression with staff retention and service quality.
• Talent pipeline looks further ahead. Suppliers may be assessed on how they identify future workforce needs, address barriers to entry and create routes through training, placements, apprenticeships and other development opportunities.

The published model also identifies likely target cohorts for the forthcoming guidance, including people who aren’t in employment, education or training, people transitioning from education into work, care leavers and people with long-term health conditions or disabilities.

Why the £5m Threshold Matters

The £5 million threshold is one of the most commercially important changes for suppliers.

For contracts worth £1 million or more but below £5 million, social value has a minimum 10% weighting. At £5 million and above, that doubles to a minimum of 20%. That can materially change bid strategy. A supplier could perform strongly on technical quality and price but still lose significant ground if its social value response is vague, poorly evidenced or disconnected from contract delivery.

The implications continue after award too. For contracts worth £5 million or more, PPN 026 requires at least one social value KPI, alongside the wider KPI requirements under the Procurement Act 2023. The government’s current guidance on Key Performance Indicators explains how KPIs are used to assess supplier performance throughout the contract lifecycle.

PPN 026 also states that evidence of poor performance against social value KPIs can be considered when deciding whether grounds exist to exclude suppliers from future tenders.

The message for bidders is straightforward: don’t make commitments simply because they appear likely to increase your score. Someone will need to deliver, measure and report them.

What Has Changed From the Previous Model?

The change comes relatively soon after the introduction of PPN 002 and its updated Social Value Model, which became mandatory for relevant central government procurements from October 2025. That model offered a broader menu of social value Outcomes and criteria. PPN 026 deliberately narrows the emphasis towards good jobs, skills and opportunities within communities.

This means bid libraries built around the previous model will need reviewing. It doesn’t mean environmental sustainability, community benefits or other forms of social value have ceased to matter across public procurement. The change relates specifically to this central government Social Value Model. Other buyers can continue to set different priorities, and environmental or community requirements can feature elsewhere within specifications, award criteria and procurement strategies.

Suppliers who regularly encounter both government requirements and TOMs can find more detail in our comparison of the Social Value Model vs TOMs.

What Should Suppliers Do Before January 2027?

There is enough information in PPN 026 for suppliers to start preparing now, even though detailed guidance is still to come.

1. Review your bid library

Identify standard social value responses, case studies and evidence built around previous Social Value Model themes.

Some of that evidence may still be valuable, but don’t simply rename an older response and assume it answers a PPN 026 criterion.

2. Map your existing capability

Look at what your organisation can already evidence across the six MACs. That might include recruitment and retention data, apprenticeship programmes, workforce training, progression, pay policies, flexible working arrangements or relationships with colleges and employment organisations.

The aim isn’t to invent six new initiatives. It is to understand where you already have credible capability and where there are gaps.

3. Involve the right teams

PPN 026 makes collaboration between bid teams and operational functions particularly important.

HR may hold evidence on recruitment, retention, pay and progression. Learning and development teams may manage training and apprenticeships. Operations will know which commitments can realistically be delivered through the contract. Bring those teams into planning before a live tender deadline.

4. Strengthen your evidence

A general statement that your organisation supports apprenticeships is weaker than evidence showing how many apprentices you’ve supported, what training they completed and what happened afterwards. Build usable evidence around the Outcomes most relevant to your target contracts.

5. Set realistic targets

Targets should be relevant to the buyer, proportionate to the contract and achievable by the teams responsible for delivery. A £2 million contract shouldn’t automatically carry the same employment or training commitments as a £100 million programme.

If you’re working through the response itself, our guide to answering social value tender questions explains how to turn commitments into specific delivery methods, targets and evidence.

6. Prepare for monitoring

Think about reporting before submission. Who will own each commitment? What data will be collected? How often can it be reviewed? If performance starts slipping, who will intervene?

This becomes particularly important where a commitment is converted into a contractual KPI.

What Does PPN 026 Mean for SMEs?

A higher weighting doesn’t necessarily mean social value becomes an advantage only for large suppliers with bigger budgets.

PPN 026 specifically tells in-scope buyers to consider market conditions, including the presence of SMEs and voluntary, community and social enterprises, before selecting appropriate Model Award Criteria. The intention is to avoid creating unnecessary barriers to participation.

SMEs may already have useful strengths to draw on, including local recruitment networks, close relationships with training providers, flexible workforce practices or detailed knowledge of particular labour markets.

The important part is turning those strengths into commitments that are relevant to the contract and capable of being measured.

Offering more isn’t automatically better. A focused commitment with clear ownership and evidence can be much stronger than an ambitious promise the business is unlikely to deliver.

The Transition Period

Not every central government tender running in 2027 will automatically use PPN 026.

The policy applies to procurements commenced on or after 1 January 2027, with a procurement considered commenced when the tender notice is published. For procurements started before that date, organisations are encouraged to transition but may continue using the previous model where switching would require disproportionate resources or invalidate earlier market engagement.

For suppliers, the practical rule is simple: follow the tender documents in front of you.

If an opportunity uses the previous Social Value Model, answer against that model rather than trying to retrofit PPN 026 because it is newer.

More Guidance Is Coming

PPN 026 isn’t the final piece of the implementation picture.

The Cabinet Office has said associated guidance will be published in autumn 2026, including detailed sub-criteria, practitioner guidance and a resource listing relevant community programmes. The guidance is expected to give contracting authorities more detail on selecting criteria, evaluating responses and measuring performance.

Thornton & Lowe will review that material once it is published and update our guidance where it changes the practical requirements for suppliers.

In the meantime, businesses targeting central government opportunities can use the published Outcomes and Model Award Criteria to review their evidence, delivery capability and internal bid processes.

Prepare for Your Next Social Value Bid

PPN 026 gives social value greater weight in major central government procurements while concentrating attention on a smaller number of jobs and skills outcomes.

That creates an opportunity for suppliers with strong employment and workforce practices, but those strengths still need to be translated into clear, measurable tender commitments.

At Thornton & Lowe, we help suppliers interpret requirements, develop realistic initiatives and turn them into compelling responses through our social value bid writing support. We can also review existing responses, strengthen your evidence and help you prepare for upcoming changes before a live deadline.

If PPN 026 is likely to affect the contracts you’re targeting, speak to Thornton & Lowe about getting your social value approach ready for 2027.