PPN 026: Initial Perspectives on the New Social Value Model

On 5 August 2026, the Cabinet Office published Procurement Policy Note 026, a revised Social Value Model for central government contracts - the second overhaul in eighteen months, and by far the more structural one. Behind the percentage weightings sits a simple question: when the government spends money, does it actually make life better where we live?

At Neighbourly, we've spent over a decade helping businesses turn "social value" from a line in a tender into something a community can actually feel. So when a policy narrows social value down to jobs and skills, we ask: what happens to everything else that makes a difference?

A good, fairly paid job is genuine, lasting social value - it pays a mortgage, keeps a corner shop trading. But a neighbourhood isn't made up of only jobs. It's also the food bank a construction firm used to stock through surplus donations, or the community garden built because a contract required it. It is currently unclear how these specific areas will be treated in the final framework, and we are awaiting further guidance to understand if they will be officially recognised in the final guidelines.

What’s changed?

Fewer promises, sharper focus

The old model (PPN 002) asked suppliers to think about a broad sweep of social value - environment, inequality, supply chain diversity, disability representation, modern slavery risk, and more (5 missions, 8 outcomes, 17 award criteria in total).

PPN 026 scales back that wide range, leaving just two outcomes, delivered through six Model Award Criteria in place of the previous seventeen:

Good jobs: creating or retaining high-quality jobs, fair working conditions, and fair pay.

Skills: training, in-work progression, and building a talent pipeline for people facing barriers to employment.

Everything else (environmental criteria, disability representation, SME or VCSE support, domestic abuse provisions) has effectively been scrapped as standalone criteria, in an effort to simplify adherence for suppliers.

The practicalities

Clearer thresholds. The model is now only obligatory for central government contracts valued at £1m+ (inclusive of VAT). Previously, compulsory social value kicked in at the much lower central procurement threshold of £139,688. This shift removes smaller procurements from the mandatory framework to reduce friction, leaving social value scoring at the buyer's discretion for bids sitting at less than £1m.

Not everything is in scope. The model doesn't apply to private utilities contracts, or to contracts whose primary purpose is overseas delivery, such as work for embassies. Local governments and the wider public sector aren't required to adopt it either, though they may choose to.

Tiered weighting. Social value will now account for a minimum of 10% of scoring for contracts valued between £1m and £5m, and at least 20% for contracts of £5m+.

Stronger accountability. Contracts over £5m require at least one published social value KPI to be reported annually. Evidence of poor performance against these KPIs can be grounds for excluding suppliers from future bids.

Community support. A "List of Community Programmes" will be published alongside future guidance, which is expected to align with the kind of local matching platforms already in use.

Detailed guidance coming. A full manual, including sub-criteria, evaluation methods, and target cohorts, is scheduled for autumn 2026.

Timing. PPN 026 applies to procurements starting on or after 1 January 2027, defined by the date a tender notice is published. For existing procurements, buyers may stick with PPN 002 if transitioning would cause disproportionate disruption or undermine established market engagement.

What should you be doing now?

1. Begin aligning your current activities with recruitment, pay progression, and apprenticeships, as these areas will take centre stage under the new model.
2. View the decoupling of wider community work from contract scoring as a positive shift. Previously, charities often had to rely on uncertain commitments tied to tender wins, where the impact was contingent on a specific contract. By separating community work from contract scoring, businesses can move toward more stable, long-term impact that does not hinge on the contract-win cycle, allowing for more consistent and reliable local support.
3. Get ready to evidence delivery, not just promise it. KPIs and published reporting mean social value now has to survive the whole contract, not just the bid.
4. Check where you actually sit. If you're bidding into private utilities or overseas-delivery contracts, or your work tends to fall under £1m, this model may not touch you directly for now - though buyers retain the discretion to apply it anyway, and local authorities may follow suit voluntarily.

The Neighbourly takeaway

PPN 026 is narrower but sharper: better jobs and skills, backed by real accountability. That matters, and good, secure work is one of the most powerful things a contract can leave behind in a community. "Every postcode" also means every kind of need, and it takes many kinds of support systems to make a neighbourhood work. The businesses that get this right will keep treating community investment as an ongoing relationship, not just a scoring exercise - and will get ahead of the shift during the transition window before January 2027, and the autumn guidance still to come, rather than react to it.