The government has released changes to public sector procurement rules to give greater weight to local jobs, skills and employment when contracts worth more than £5m are awarded.
From 1 January 2027, the weighting given to local community benefits will increase from 10% to 20% for central government procurements.
The changes mean contractors bidding for major public sector work will need to demonstrate how their projects will create local employment, address skills shortages and provide opportunities for apprenticeships and work experience.
This could have implications for healthcare construction, where major hospital and healthcare estate projects are typically delivered through high-value public sector contracts.
Under the new rules, bidders can receive additional credit for creating local jobs that pay above the minimum wage, as well as for providing training and work experience, including placements of at least 45 days.
The Government said the changes are intended to ensure public spending delivers greater benefits for local communities.
Public procurement represents a market worth around £90bn a year.
Detailed technical guidance on the new requirements is expected in autumn 2026, ahead of the rules coming into effect on 1 January 2027.
“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,” said Peter Ware, Partner in Procurement and Head of Government at UK and Ireland law firm Browne Jacobson.
The move builds on the growing role of social value in NHS construction procurement, with healthcare contractors increasingly expected to demonstrate the wider benefits their projects deliver for local communities.
The changes also follow the introduction of the Procurement Act 2023, which has brought wider reforms to the way public sector contracts are awarded and managed.
