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Firms that can point to real apprenticeship numbers, training hours and local hires stand to do well under the new model. Firms that relied on generic social value boilerplate will need to rethink their approach.
The“ backing British” debate
Alongside this, Chancellor of the Exchequer John Healey has set forth one of the Government’ s key priorities when it comes to public sector procurement:“ buying British not if possible, but by design”. While there were some moves in this direction under Keir Starmer, this formulation is stronger than anything seen under the previous government.
There have been challenges to the new agenda. The Institute for Government has pointed out that raising social value weighting to 20 % on larger contracts carries a real risk to value for money if criteria are not kept tightly focused, and some commentators have questioned whether prioritising domestic delivery so explicitly sits comfortably alongside the Government’ s other procurement principles.
There are also limits to how far“ backing British” can go. Covered procurements still have to comply with equal treatment and non-discrimination requirements, including protections for suppliers covered by the UK’ s international procurement agreements.
Our view is that this is a genuine, and possibly durable, shift in direction, but not a guarantee. UK-based firms should expect a fair hearing, not an automatic win. The businesses that benefit will be the ones that can demonstrate the domestic jobs, training and supply chain contribution the policy is designed to reward, in the same detailed, evidenced way as any other part of a bid.
Opportunities for SMEs
Social value is only part of the picture. Central government departments already have three-year targets for direct spend with SMEs, with relevant agency and nondepartmental public body spend included within those targets. Two-year targets for direct spend with voluntary, community and social enterprises are also now in place, with results reported annually.
Departmental ambition varies considerably, and some published targets are modest, which is a reminder that the opportunity is not spread evenly. It is worth understanding a department’ s own target and track record before deciding where to focus your bidding effort, something we regularly help clients research before committing time to a tender.
The wider intent, reinforced by the Chancellor and senior figures around the Prime Minister, is for public procurement to be used more deliberately as a lever for growth, with an explicit ambition to see the benefit felt in communities right across the country, not concentrated in London and the South East.
Housing and infrastructure in focus
Burnham has been vocal about the role construction and infrastructure will play in his wider agenda, from an ambitious council and social housing pledge to continued investment in regional infrastructure and devolution.
In July, the Government announced greater powers for local leaders over housing, transport, skills and regeneration, including measures intended to unlock stalled development sites. For construction firms, that makes regional pipelines and relationships with devolved authorities increasingly important to watch alongside Whitehall procurement.
Exactly how this translates into new procurement routes and frameworks is still becoming clear. What is already evident is a political will to direct significant public investment into housing and infrastructure delivery, which is worth watching closely over the coming months.
Defence and advanced manufacturing have also been highlighted as priorities under the new administration, with a stated ambition to build stronger domestic supply chains and support jobs and industrial capability at home. This points to a broader pattern: government using its purchasing power more deliberately to support UKbased delivery.
What this means for your business None of this changes what wins contracts. Value for money, technical capability and a well-evidenced bid still matter most. But three things are worth doing now.
Firstly, revisit your social value story with the new model in mind. If your existing social value content leans on broad environmental or community commitments, it needs reworking around jobs, skills and evidence, not softened language on the same themes.
Next, start building a proper evidence base. Apprenticeship numbers, training hours and local hire figures will carry real weight under PPN 026. If you are not already tracking these, now is the time to start.
You should also watch the exact departmental SME targets, not just national headlines. The general political direction is encouraging, but the practical opportunity will show up department by department and framework by framework.
Looking ahead Further guidance on how PPN 026 should be applied in practice is expected from the Cabinet Office in autumn 2026, and the coming months should reveal more about how the Government’ s wider procurement ambitions translate into actual contracts and investment. As with every procurement reform, the real impact will be felt in the detail rather than the headlines. We will continue to track that detail and share what it means for NFB members as the agenda develops.
Andy Boardman is Digital Content Specialist at Thornton & Lowe, part of the Procurement Growth Group, which supports SMEs across the UK to win public sector contracts.
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