First secretary of state Louise Haigh has announced that the Government will be simplifying procurement rules to focus social value contract requirements on job creation and skills development.

With this move, other social value requirements for companies bidding on government contracts – including net zero criteria – will no longer be considered, according to reports.

However, the value of the criteria that remain has been increased. Currently, social value only makes up 10% of the score given to bids on central government contracts, but once these changes come into effect from 1 January 2027, it will make up 20% of a bid's score for contracts worth £5m or more.

Plans have also been designed to reduce the impact on ‘smaller, scaling and innovative businesses' by simplifying rules and raising the contract threshold to over £1m so they ‘don't typically apply to the work smaller firms and local social enterprises are bidding for'.

Announcing the shift in criteria, Ms Haigh said: ‘For too long, securing government contracts has been a tick box exercise that fails to deliver the positive change that people feel in their pocket and see in the places they live.

‘We are doing things differently. These new rules will ensure the £90bn that is spent each year through government contracts supports British jobs, skills and people in every postcode.'

Under the new policy, bidders will be awarded ‘extra credit' for creating local jobs that pay above the legal minimum wage and ‘treat workers properly', as well as ‘helping to plug local skills gaps' by offering training.

To make sure companies ‘honour their pledges', government departments plan to allocate a key performance indicator for major contracts and make annual progress reports available publicly. Suppliers' performance will be ‘measured against their commitments'.

Detailed guidance is expected to be provided this Autumn prior to the introduction of the changes in the new year.

Stuart Togwell, CEO at Kier Group, said: ‘This new model is a welcome step to ensuring public procurement supports lasting benefits for people, communities and businesses across the UK.

‘At Kier, we have long believed that what we do is about more than just the infrastructure we create. Via our regional presence, we create jobs, develop skills, strengthen local supply chains and open opportunities for those who face barriers to employment.

‘This new approach recognises the powerful role procurement can play in supporting British businesses to generate positive social impact alongside economic growth. It provides a clear framework for industry and Government to work together to deliver growth and opportunity, while building the skilled workforce the country needs.'

Andy Milner, CEO of Amey, added: ‘We welcome the Government's focus on ensuring public procurement delivers tangible economic and community benefits. Public investment should do more than deliver services. It should create local jobs, develop skills and open opportunities for those who need them most.

‘At Amey, we work with local authorities, customers, supply chain partners and community organisations to create pathways into employment for young people, care leavers, veterans and underrepresented groups. In 2025, we created £248m worth of social value, up from £211m the previous year, and will continue to invest in the skills, supply chain partnerships and community programmes that help local economies grow.

‘By aligning investment with local needs and clear social outcomes, we can maximise the impact of public spending and ensure communities across the UK benefit from economic growth and opportunity.'