Public spending should do more than buy services. It should create good work, strengthen communities and open opportunities to people who have been left behind.

The Cabinet Office’s updated guidance on PPN 026, The Social Value Model, published on 28 October, offers an opportunity to consider how procurement can achieve these ambitions.

From January 2027, the model applies to relevant central government contracts worth £1 million or more. It replaces a much longer list with six selectable award criteria covering jobs, fair pay, working conditions, training and progression. Social value must account for at least 10% of tender scores, rising to 20% for contracts worth £5 million or more. Other public authorities may choose to adopt the approach.

The guidance also provides for recognition of existing, inherent social value and introduces a proposed list of community programmes that contractors can support.

These are useful developments. But the greater opportunity is to move from social value, often expressed through additional promises by contractors, towards public value: using government purchasing power to shape markets and achieve wider social, economic and environmental ambitions.

Make good work a condition of contract

The narrower model has raised concerns about losing wider social and environmental objectives. Yet these can still be incorporated into public contracts. In September, a Cabinet Office minister confirmed that environmental and net-zero requirements could remain in contract specifications.

Public authorities can also establish fair pay and good working conditions as contractual requirements where lawful, relevant and proportionate. This makes decent employment standards a condition of delivering public services, rather than an optional commitment for which bidders receive extra marks.

The Department for Business and Trade is already an accredited Living Wage Employer, including its regularly contracted workers, while Manchester City Council expects suppliers to pay the Real Living Wage.

BetterforUs is calling on government to build on these examples by making the independently calculated Real Living Wage and good working conditions requirements of public service contracts wherever lawful and proportionate. Government should lead by example, demonstrating what Good Growth means in practice.

This matters especially in the everyday economy of social care, cleaning, catering, grounds maintenance and other essential services, where low pay and poor working conditions remain widespread.

The announcement in the Budget that a New National Procurement Policy Statement would prioritise high quality jobs, skills an fair play is something that BetterforUs has called for for a number of years and is to be warmly welcomed.

Workplaces must be ready for people

The guidance allows authorities to recognise inherent social value. For supported employment organisations, employing disadvantaged people is not an additional promise; it is central to their purpose.

However, Annex B’s Standard Reporting Metrics remain heavily focused on numbers: jobs created or retained, people trained and opportunities provided. Numbers are useful for monitoring commitments, but they cannot, on their own, measure public value.

Our 2024 publication, Public Good Procurement, criticised numerical approaches such as National TOMs and supported the previous Cabinet Office policy of assessing quality rather than volume. That distinction remains essential. A large contractor retaining hundreds of workers through TUPE may report more jobs than a supported employment organisation creating ten sustained opportunities for people excluded from employment for years. Yet the latter may deliver greater benefits for individuals, communities and the public purse.

We are calling on government to supplement its Standard Reporting Metrics with qualitative measures that capture the difference employment makes: the barriers people have overcome, the quality and security of their jobs, the support and adaptations provided by employers, and opportunities for retention and progression. These measures should recognise wider benefits, including improved wellbeing, greater participation in society and potential savings to public services.

We spend much time asking how people can become ready for work. We should spend more time asking how work can become ready for people.

Good growth begins in our postcodes

The government proposes a list of community programmes that contractors can support through their social value commitments, connecting public contracts with employment, skills and other initiatives. The intention is to provide recognised opportunities for suppliers to contribute, rather than requiring every contractor to devise separate programmes.

The list has yet to be published. National and regional initiatives could be valuable, but there is a risk that larger programmes will dominate while small, neighbourhood organisations become delivery partners for major contractors rather than public service providers themselves.

The government wants good jobs, skills and opportunities in every postcode. That requires engaging the people and organisations already working in those communities.

In our guide, Procurement for Community Public Good, we argued that big thinking must also mean thinking small. Grassroots organisations understand local needs, reach people facing disadvantage and create opportunities for wider participation in society.

The guidance encourages engagement with trade unions, which we welcome. People with lived experience of disadvantage and the organisations supporting them could also play a vital role in shaping the services and employment opportunities their communities need.

Commissioners should involve them before tenders are written and divide large contracts into accessible lots. They should also use Section 32 of the Procurement Act 2023 to reserve competitions for qualifying supported employment providers tackling disadvantage in the labour market.

Government must lead Good Growth

The new guidance offers an opportunity, but Good Growth requires government to lead by example. It must use its purchasing power to make the Real Living Wage and good working conditions the standard for public contracts, rather than optional promises from suppliers.

It must also involve the people and organisations rooted in our communities, particularly those who have been excluded from economic and social opportunities. Disabled and disadvantaged people should not simply be helped to enter the labour market. They must have a voice in changing the world of work itself, making workplaces more inclusive, accessible and responsive to their needs.

That is how public procurement can move beyond social value to public value: not simply buying services, but shaping an economy in which good work, opportunity and participation reach every postcode.