UK government doubles jobs and skills weighting in contracts worth £5m or more

Rules taking effect on January 1, 2027 will assess central government suppliers on training, apprenticeships and work placements, with annual public reporting on major contracts

Central government procurement rules taking effect in January 2027 will increase the weighting given to local jobs, skills and training commitments.

Businesses bidding for UK central government work will be judged more heavily on commitments to create local jobs, address skills shortages and help young people into apprenticeships or work placements under procurement rules taking effect in 2027.

For contracts worth £5 million or more, the weighting given to benefits for local communities will rise from 10% to 20% of the assessment score. Bids from UK and international providers will be covered by the change.

The government describes its annual contract market as worth £90 billion. The new scoring is intended to direct more of that spending toward jobs, training and work experience in the communities affected by each contract.

Assessments will consider whether bidders offer local jobs paying above the legal minimum, support workers appropriately and provide training opportunities, including commitments such as 45 days of work experience.

Suppliers will also be evaluated on support targeted at young people not in education, employment or training, known as NEETs, as well as care leavers and people with long-term health conditions.

First Secretary of State Louise Haigh says: “We are doing things differently. These new rules will ensure the £90 billion that is spent each year through government contracts supports British jobs, skills and people in every postcode.”

Two thresholds set different limits

Two contract values sit within the reforms. The doubled 20% community-benefit weighting applies to contracts worth at least £5 million.

Separately, the government says the threshold at which the wider requirements typically apply will rise to contracts worth more than £1 million. The change is intended to reduce the demands placed on smaller firms, social enterprises and civil society organizations bidding for lower-value work.

The Cabinet Office says some existing requirements will be removed and the process simplified, although the announcement does not identify every measure being scrapped.

Craig Beaumont, Executive Director at the Federation of Small Businesses, says: “Lifting the threshold to £1 million ought to see many more small firms winning contracts, as small businesses deliver huge intrinsic social value but they can often struggle to demonstrate this in procurement processes.”

Contract commitments will face public tracking

Government departments will assign a key performance indicator to social commitments made under major contracts and publish annual progress reports. Supplier performance will be measured against the pledges made during procurement.

The announcement does not define which awards will count as major contracts or specify the consequences for suppliers that fail to meet their commitments. Detailed technical guidance is due in fall 2026.

The rules are also being reflected in the National Cloud Infrastructure Programme, which is exploring how the government can coordinate cloud demand across the public sector.

Supported by the Cloud Challenge Book 2026, the program is intended to consolidate government buying power and work with industry on digital infrastructure for AI. Its workforce component includes opportunities for young people, including those not in education, employment or training, to develop digital and AI skills.

No figures are provided for the number of training opportunities expected through the cloud program.

Local authorities will also be involved. In the West Midlands, local leaders will work with central government and industry on the 3,000 Futures initiative, using public procurement to support young people into employment or training. The work builds on the region’s Youth Guarantee Trailblazer.

The new procurement rules will apply to central government contracts from January 1, 2027, following publication of the detailed guidance in fall 2026.