From January 2027, central government procurements valued at £5 million or more will apply a minimum 20% weighting to local benefits, increasing the previous minimum requirement of 10%.
Whilst the headline change is the increase from 10% to 20%, the reality is that many public sector contracts already place significant emphasis on social value. The real shift is not the percentage itself. It is the growing expectation that bidders demonstrate how investment will address specific local priorities – whether that is tackling skills shortages, reducing economic inactivity, supporting local businesses or creating new routes into employment.
The opportunity is not to simply score more marks at tender stage. It is to direct public spending towards the communities that need it most. The practical test for bidders will be whether social value commitments translate into tangible local outcomes for skills, employment and economic opportunity.
What Could This Mean for Communities?
For communities, the most significant aspect of PPN 026 is the opportunity to align public spending more closely with local need. Bidders will increasingly need to demonstrate they understand the challenges facing specific places and how contract investment can help address them.
In reality, this will mean more young people accessing meaningful work experience, apprenticeships and entry-level roles, more people overcoming barriers to employment and securing sustainable jobs, and more local supply chains, training providers and voluntary organisations contributing to project delivery. It provides an opportunity for bidders to evidence their understanding and capabilities aligned to the real issues impacting economic development and employment in regions/sub-regions, including youth unemployment, economic inactivity, digital exclusion, low skills attainment, transport barriers and inequality.
The challenge is that no two communities are the same. Skills shortages in West Cumbria differ from those in Cambridge. Barriers to employment in inner-city Manchester differ from those in rural Lanarkshire. Social value commitments therefore need to be evidence-led commitments built around local labour market conditions, stakeholder priorities and existing community provision. The move to improve local impact will require more collaborative and collegiate approaches across consultants and contractors targeting regions to avoid duplication.
EiB work with clients to understand the communities affected by contracts long before bid submission, identifying local priorities, mapping stakeholders and testing where investment can create the greatest impact. We help bidders develop place-based strategies shaped by local stakeholders, education providers, community organisations, employers and delivery partners. Our approach enables bidders to move beyond commitments based on outputs, such as apprentice numbers or volunteer hours, and focus instead on tangible community outcomes. The result is social value strategies that are better aligned to local need, easier to evidence and more likely to deliver lasting benefits beyond the life of the contract.
A Wider Challenge for Infrastructure Projects
In areas experiencing significant infrastructure investment, multiple contractors may engage the same schools, colleges, SMEs and community organisations. Through collaboration, coordinated approaches can reduce duplication, increase impact and create more sustainable skills and employment pathways for local residents. On a large Scottish trunk road upgrade, EiB supported collaboration across contractors and work packages to help coordinate delivery of Transport Scotland’s schools and skills programme, creating a more joined-up approach to community engagement and skills development.
What Should Bidders Do Now?
Bidders should use the period before January 2027 for social value planning, focused on a clearer framework of needs based social initiatives, targets and collaboration for more measurable, local delivery plans.
Larger organisations will need to show national programmes can be tailored to local outcomes, improving opportunities for meaningful jobs, apprenticeships, work placements, supply chain opportunities and skills interventions that respond to real local need. For SMEs and social enterprises, they may experience more of a level playing field, able to demonstrate genuine community impact and understanding.
As weighting increases and more transparent information is required, social value will become a contract delivery issue as much as a bid evaluation issue. Bidders that can evidence practical, measurable and locally targeted benefits will be better placed to score well at tender stage and deliver with confidence once the contract is awarded.
How EiB Can Help
PPN 026 signals a continued shift towards place-based outcomes, requiring bidders to demonstrate not only what they will deliver, but how those commitments will create meaningful benefits for local communities and support government priorities. Success will depend on having a clear strategy, robust local insight and commitments that can be evidenced, measured and delivered.
EiB helps clients translate procurement requirements into evidence-led social value strategies that reflect local priorities and contract objectives.
Our support includes:
- Stakeholder mapping
- Community engagement
- Local needs analysis
- Social value strategy development
- Bid support
- Independent review.
We help clients identify interventions that are achievable, measurable and capable of delivering genuine value throughout contract delivery.
For organisations pursuing public sector opportunities, preparation ahead of procurement remains increasingly important. Whether reviewing your pipeline, strengthening your local value proposition or developing evidence-led social value commitments, EiB can help you position your business to respond confidently to evolving procurement requirements and maximise success.
The organisations that succeed under PPN 026 are unlikely to be those making the biggest promises. They will be those that best understand the communities affected by their contracts and can demonstrate how investment will address local need.