PPN 026: What the New Social Value Model Means for Construction Bidders in 2027

Social value is already an established part of public sector procurement, but the rules are about to change again. From 1 January 2027, a new Social Value Model introduced through Procurement Policy Note 026 (PPN 026) will apply to certain central government contracts.

For construction contractors, the headline change is significant. Social value will carry a minimum weighting of 10% on eligible contracts valued between £1 million and £5 million, rising to at least 20% on contracts worth £5 million or more. That makes social value much more than a supporting paragraph in a tender response. On major construction bids, it could account for one-fifth of the available marks. This could make the difference between winning and losing.

What is PPN 026?

Published by the Cabinet Office in August 2026, PPN 026 sets out a streamlined Social Value Model centred on good jobs, fair working conditions, skills and access to employment.

The policy applies to central government departments, executive agencies and non-departmental public bodies. Other public sector authorities may choose to adopt it, but they are not automatically within scope.

It covers procurements with a total contract value of at least £1 million, including VAT, commenced under the Procurement Act 2023. In this context, a procurement commences when its tender notice is published. The model therefore applies to eligible tender notices published on or after 1 January 2027. Procurements started before that date may continue under the previous model where changing approach would require disproportionate resources or undermine earlier market engagement.

What is changing under the 2027 Social Value Model?

Previous versions of the Social Value Model covered a wide range of priorities, including economic inequality, climate change, equal opportunity and wellbeing. PPN 026 concentrates the central government model much more closely on British jobs, skills and opportunities.

Six Model Award Criteria sit beneath these outcomes. They include creating or retaining high-quality jobs, providing fair working conditions and pay, offering training and retraining, enabling in-work progression and building a sustainable talent pipeline. These themes are particularly relevant to construction. The industry continues to face well-documented skills and recruitment challenges, while projects can create apprenticeships, work placements, training opportunities and lasting employment in the communities where work is delivered.

The new model will place greater emphasis on bidders explaining how those benefits will arise directly from the contract, rather than relying on broad corporate social responsibility policies.

Social value tender weighting will increase

PPN 026 introduces two minimum weighting levels:

• Contracts worth at least £1 million but less than £5 million must allocate a minimum of 10% of the total tender score to Social Value Model criteria.

• Contracts worth £5 million or more must allocate at least 20%.

  
  

Where a contracting authority uses another evaluation method, such as Price per Quality Point, the equivalent weighting will apply to the overall non-price or quality score.

For construction bidders, the practical message is clear: a generic social value method statement will carry considerably more risk than before. A technically strong and commercially competitive tender could still fall behind if its employment, skills and community commitments are vague, poorly evidenced or disconnected from the project.

What will evaluators expect from construction contractors?

Social value award criteria must be relevant to the subject matter of the contract and proportionate to its nature, value and complexity. A contracting authority cannot simply ask suppliers to support unrelated initiatives or favour bidders because they already operate locally.

However, bidders may be asked to explain how their delivery model will create or retain jobs in the relevant area, tackle identified skills shortages or help people who face barriers to employment. Target groups identified in PPN 026 include people who are not in employment, education or training, those moving from education into employment, people with long-term health conditions or disabilities, and care leavers.

A credible construction social value response might therefore cover apprenticeships linked to the programme, work placements offering meaningful site experience, recruitment pathways developed with local organisations, or training that helps existing employees progress into higher-skilled and better-paid roles.

Fair pay, workforce wellbeing, retention, flexible working and access to trade union representation may also feature where they are appropriate to the contract.

The strongest responses will go beyond promising numbers. They will explain the need being addressed, identify delivery partners, allocate responsibility, set a timetable and show how each commitment will be measured.

Social value KPIs and contract delivery

PPN 026 makes the connection between tender promises and contract performance explicit. Social value commitments must be incorporated into suitable contractual mechanisms and monitored through key performance indicators.

For contracts valued at £5 million or more, at least one social value KPI must be established in addition to the other KPIs required by the Procurement Act 2023. Performance information will generally be published through the central digital platform and reported at least annually.

This raises the stakes for suppliers. Commitments should be ambitious enough to score well but realistic enough to deliver. Poor performance against social value KPIs may even be considered when deciding whether grounds exist to exclude a supplier from future tenders.

Bid teams will therefore need early input from the people responsible for recruitment, learning and development, supply chain management, site delivery and contract reporting. Social value cannot safely be developed in isolation shortly before submission.

What does PPN 026 mean for frameworks?

The new model also affects framework procurement. Where social value will be assessed during a framework call-off, it must first have been assessed when the framework itself was established. Contractors should review upcoming framework opportunities carefully and understand what has been committed at each stage. Framework-level promises and call-off proposals must be compatible, measurable and free from duplication.

Further Cabinet Office guidance is expected in autumn 2026, including detailed sub-criteria, metrics and support for applying the model in practice. Until then, bidders should distinguish between confirmed PPN 026 requirements and areas where the final implementation detail is still to come.

How construction businesses can prepare

Contractors do not need to wait until January 2027 to act. Existing social value commitments can be reviewed now to establish which ones fit the new focus on jobs and skills. It is also worth identifying credible delivery partners, including colleges, training providers, employment services, community organisations and specialist supply-chain businesses. Baseline performance data should be gathered, responsibilities assigned and reporting processes tested before they are needed in a live tender.

Above all, construction companies should move away from reusable lists of community benefits. A high-scoring social value tender response needs to be specific to the project, aligned with the stated Model Award Criteria and supported by deliverable, evidenced commitments.

PPN 026 will make that quality of response increasingly important. With social value representing up to one-fifth of the tender score on major contracts, preparation must become part of bid strategy rather than a final-stage compliance exercise.

Procter Street supports construction businesses with social value quantitive commitments and delivery plans, bid writing, tender strategy and the development of clear, measurable responses for public sector opportunities.

If your business is preparing for the 2027 Social Value Model or needs support with a current construction tender speak to our team.

This article is based on the Cabinet Office’s PPN 026 overview and full Social Value Model. Further implementation guidance is due in autumn 2026.

Email hello@procterandstreet.co.uk or call 0161 560 1138.