Government Contracts to Require Job Creation Instead of Green 2026

The UK government is overhauling its procurement rules, requiring companies to demonstrate job creation and youth employment support instead of green and progressive values. This major shift in government contracts aims to reduce the number of young people not in education, employment, or training (Neets) and boost regional growth.

New Procurement Rules Prioritize Jobs Over Green Targets

Under the new measures, public sector buyers will double the weight given to job creation from 10% to 20% when evaluating contract bids. Instead of focusing on social and environmental wellbeing, companies must show how they will create local jobs that pay above minimum wage, offer training, or plug skills gaps. This change is designed to make the £90bn annual procurement budget work harder for local communities.

Louise Haigh, the first secretary of state, emphasized that the previous system was a "tick-box exercise" that failed to deliver tangible benefits. Small businesses, often locked out by complex requirements, will find it easier to compete, especially with contracts under £1m exempt from the new rules.

Impact on Businesses and Young People

For businesses, this means a shift in how they prepare bids. Instead of showcasing environmental policies, they must outline concrete plans for hiring, training, and supporting young people. This could open doors for SMEs that have strong local ties but lack the resources for extensive green reporting.

For young people, the policy aims to create more entry-level opportunities and apprenticeships, directly addressing the rising Neet numbers. The government hopes this will lead to better long-term employment outcomes and regional economic resilience.

Comparison: Old vs. New Contract Evaluation Criteria

Key Takeaways for Stakeholders

• Government procurement now prioritizes job creation over green targets.
• Weighting for social value doubles from 10% to 20%, but with a new focus.
• Contracts under £1m are exempt, benefiting smaller companies.
• Businesses must demonstrate local job creation and training opportunities.
• The policy aims to reduce Neet numbers and boost regional growth.

FAQ

This policy shift marks a significant change in how taxpayer money is spent. For businesses, adapting to the new criteria will be crucial to winning government contracts. The focus on job creation is expected to have a direct impact on local economies and youth employment.