New public procurement rules to support NEETs into work from 1 January 2027
The UK Government has signalled an upcoming change to public procurement rules to back British jobs, skills and opportunities.
From 1 January 2027, contracts awarded by Central Government over £1 million will be assessed on how bidders help local people develop new skills and support young people into apprenticeships or work placements.
Using the UK Government’s £90 billion annual purchasing power as a lever for economic growth
The forthcoming guidance, announced on 5 August, extends an existing policy of stimulating economic growth by increasing public procurement and directing it at domestic businesses. Last year, Chancellor John Healey, then Defence Secretary, outlined that ‘for the first time, we are making British-based businesses a priority for British taxpayers’ defence investment’, specifically targeting Small and Medium Enterprises (“SMEs”). According to the Institute for Government, SMEs currently account for a fifth of all public procurement spending.
The latest changes are designed to support the Government’s objective to reduce the number of young people not in education, employment or training (“NEETs”) by giving more weighting to how potential suppliers will tackle skills shortages and provide apprenticeships and work placement opportunities.
This comes as Andy Burnham, the new UK Prime Minister, signalled an intention to maintain existing fiscal rules while exploiting ‘any flexibility within them’, by classifying equity or infrastructure commitments as balance sheet assets, offsetting borrowing. This could potentially unlock £9 billion of additional Government borrowing a year.
What legal changes to expect
The UK’s post-Brexit public procurement law, the Procurement Act 2023, and the Procurement Regulations 2024, came into force for new public contracts in February 2025. From time to time, the Cabinet issues supplementary Procurement Policy Notes (“PPNs”) which apply to all central government departments and other “in-scope organisations”. PPN002 required that a minimum 10% weighting of the total evaluation score should be applied to social value criteria.
Commentary around these latest changes in UK government priorities suggests that this minimum weighting will be raised to 20% for contracts worth £5 million or more. There is also an indication that procuring bodies will be required to focus more on potential suppliers who will create local jobs, offer training and plug local skills gaps – prioritising this over wider social and environmental value.
More clarity should come when Parliament returns in the Autumn, after which we can expect new PPNs to set out the detailed requirements.
