On 5 August, the Cabinet Office ordered that public spending must back British jobs and skills in every postcode, doubling the social value weighting from 10% to 20% for contracts worth £5m or more – part of the wider economic growth agenda now being driven from the top of government. Alongside it, Procurement Policy Notice (PPN) 026 set out a streamlined Social Value Model – trimmed to two clear outcomes, Good Jobs and Skills – which will take effect on 1 January 2027.
Strictly, this policy applies to central government departments, agencies and arm's-length bodies. It does not, on paper, apply to the NHS. But NHS England has already confirmed through its Sustainable Procurement Forum that the health system will adopt the same model, from the same date.
HCSA welcomes that decision unreservedly – we believe it should be the floor for what comes next, not the ceiling.
What's changed, and why it matters
The new model is deliberately narrower than its predecessor.
Environmental criteria, modern slavery provisions and healthcare inequalities have been removed as standalone weighted outcomes – not abandoned, but pursued through other routes – so that every point of social value weighting in a tender now points towards securing key economic outcomes: good jobs and skills, delivered in the communities the NHS actually serves. For contracts of £5m or more, that weighting has doubled. And at least one social value KPI must now be built into contract management from day one, not treated as a box ticked at award and forgotten thereafter.
This is a real, structural shift in how the UK’s largest employer and largest public purchaser is expected to align with public policy. It is exactly the direction HCSA called for in our letter to the Secretary of State for Health and Social Care on 22 July: that procurement should never be viewed solely as a mechanism to purchase goods at the lowest price, and that every pound spent by the NHS should be treated as an opportunity to deliver economic value back to the communities that fund it.
Why NHS Procurement is uniquely placed to deliver this
£35 billion is spent every year with over 115,000 suppliers and over 85% of them are SMEs – the NHS has more reach into local economies, in every postcode, than almost any other public purchaser. If central government's ambition is genuinely to make every pound of public spending work harder for British jobs and skills, there is no bigger lever available than NHS Procurement – and there is no profession better placed than ours to enable this important policy lever.
From adoption to mandate
In our letter to the Secretary of State, HCSA argued that NHS Procurement remains fragmented, dispersed, and without a consistent mandate to direct spend toward securing best value – best practice will remain in silos and optional, rather than becoming the standard everywhere. NHS England's decision to adopt PPN 026 is welcomed. But it is still a choice, made centrally, that individual systems and Trusts could, in principle, interpret, resource, and deliver very differently, in the absence of a clear national mandate to make it count consistently.
This is why the operating model matters as much as the policy itself. Any future model for NHS Procurement and Supply Chain Management needs to balance national direction with genuine regional and local delivery – to guarantee that a contractual commitment to good jobs and skills made in a tender in the North West means the same thing, and is measured the same way, as one made in the South East, whilst ensuring that the specific skills gaps and employment barriers of each community can still shape how that commitment is delivered on the ground.
This is not an abstract ambition. Just as clinicians and ward staff so often live in the communities they treat, NHS procurement and supply chain teams work every day with the many local suppliers, contractors and third sector organisations who serve their hospitals – they see first-hand the difference that spending decisions make to jobs and opportunities on their own doorstep. Local government has long understood this dynamic in how it commissions services; the NHS, with its scale and its presence in every community in the country, is uniquely placed to do the same.
In our letter, we called for a new National Commercial and Growth Policy to give procurement professionals a clear, consistent mandate to direct NHS spend toward the greatest economic value – not just the lowest price. The new Social Value Model, and the Government's wider growth agenda now taking shape under the Prime Minister's focus on devolution and place-based investment, gives that argument new and immediate weight.
The mechanism our sector needs already exists in outline. What has been missing is the decisiveness to adopt it fully, rather than incrementally.
Our profession's role
None of this policy delivers itself. Every KPI, every tender criterion, every judgement about which community programmes genuinely serve local need rather than simply satisfying a scoring matrix, depends on the skill and integrity of the procurement and supply chain professionals who design, run and manage these procurements and contracts – the 5,000-plus members that the HCSA represents every day.
We should be proud of what this announcement represents: a government finally treating public procurement as the lever for growth it always should have been. And we should be honest that realising it, at NHS scale, will need investment in our people, our systems, our processes, and our commercial capability, in order to match the ambition – precisely the case HCSA has already made to government, and will keep making.
Voluntary adoption is a good first step. But a clear national mandate will embed this as a lasting legacy.
HCSA
Read HCSA’s letter to Health Secretary Yvette Cooper here