The UK Government has announced it will change assessment criteria related to public sector procurement to place a greater emphasis on the creation of jobs and investment in local areas.

Businesses bidding for government contracts – a market worth £90bn annually – will be judged on their commitment to creating jobs, tackling skills shortages, and supporting young people into apprenticeships and work placements within their communities. 

Scoring for bringing benefits to local communities will be raised from 10% to 20% for contracts with a value exceeding £5m.

Bidders can get extra credit for creating local jobs that pay above minimum wage, as well as helping to plug local skills gaps by offering training, such as 45 days of work experience.

Detailed technical guidance will follow in the autumn, with the new rules taking effect from 1 January 2027, applying to central government procurements. 

Peter Ware, Partner in procurement and Head of Government at UK and Ireland law firm Browne Jacobson, said: “This intervention reflects the significant weight that public sector procurement carries in the national and local economy, and the new Prime Minister’s commitment to leveraging greater social value from government contracts. 

“This continues a trajectory that has been in motion since the Procurement Act 2023 was implemented in February 2025, and strengthened by the Procurement Policy Note 024 guidance published by the Cabinet Office in June this year, which introduced a mandatory public interest for contracts exceeding £1m that must consider key economic and social considerations.

“What is different, though, is the government’s eagerness to give procurement such prominence in its policy agenda under Andy Burnham, who has made tackling the youth unemployment and economic inactivity crisis one of his defining missions.

“This should therefore focus minds among not only contracting authorities but also businesses that hope to win high-value public sector work. They will need to demonstrate tangible ways in which they are creating jobs and work experience opportunities, and upskilling or reskilling the existing workforce locally.

“Businesses should also take note of Whitehall’s focus on deeper devolution, with skills budgets set to be controlled by strategic authorities where these exist. This provides a great opportunity for employers to work closely with mayors on to access skills funding when rolling out new training initiatives.”