Construction firms bidding for major public sector contracts will soon have to place greater emphasis on creating British jobs and developing workforce skills, following a government overhaul of its Social Value Model.
The reforms, announced by the Cabinet Office, will double the weighting given to social value in contracts worth more than £5m, increasing it from 10% to 20%. Rather than assessing a broad range of environmental and social commitments, the revised model will prioritise commitments to create quality employment, apprenticeships and training opportunities that address local skills shortages. Contracts below £1m will be exempt from the requirements.
The changes form part of the government’s wider plans to use the UK’s public procurement budget to support domestic growth, strengthen supply chains and tackle economic inactivity by helping more people into work.
In construction, the announcement could reshape how contractors compete for public work. Demonstrating investment in apprenticeships, upskilling existing workers, supporting T Level placements and recruiting locally is expected to become increasingly important when bidding for government-funded projects.
The changes also seek to make procurement more accessible for SMEs by simplifying social value requirements, with ministers arguing that previous frameworks often favoured larger organisations with dedicated bid-writing resources.
The move builds on the updated Procurement Policy Note (PPN 002) Social Value Model introduced under the Procurement Act 2023, which already requires central government buyers to consider wider social outcomes when awarding contracts. The latest reforms narrow that focus, placing jobs and skills at the centre of procurement decisions as part of the government’s industrial strategy.
The announcement has prompted mixed reactions. Business groups and organisations representing social enterprises have welcomed the stronger focus on employment and skills, particularly for young people entering the workforce. However, some environmental organisations have expressed concern that reducing the prominence of net zero and other wider social objectives could weaken incentives for sustainable procurement.
The policy signals that investment in people may become an even more important competitive advantage when securing public sector work. Contractors that can demonstrate clear commitments to apprenticeships, local recruitment and workforce development are likely to be well placed as the new procurement approach is introduced from next year.
Accompanying guidance will be published in autumn 2026.
