2026 has brought significant changes to public sector procurement, including transparency rules, digital platform mandates, and regulatory overhauls. These reforms have been implemented to support sustainable public procurement, transparent public spending, security, and economic growth; but what do these changes mean for those of us working closely with the public sector?
PPN 024: The Cabinet Office is rewriting the rules for big service contracts
The government has recently released guidance on PPN 024: The Public Interest Test and Insourcing Strategy. This PPN aims to move away from procurement decisions being made solely on a contract-by-contract basis and to encourage contracting authorities to consider long-term capability and capacity to deliver high-quality and sustainable services, rebuilding internal capability and reducing reliance on external contractors.
From 1st April 2027, for all new projects and procurements, contracting authorities can no longer default to the private sector when a service contract expires, instead they must evaluate if they can do the work themselves before considering going out to tender. In-scope organisations must conduct a Public Interest Test for all services with a value over £1m (including VAT), this evaluates the feasibility of delivering a service in-house, submit outcomes from tests quarterly to the Government Commercial Agency, and publish a five-year Insourcing Strategy by 30th April 2027 (if there is an annual contract spend exceeding £100m). The outcome of the test gives buyers a ‘Provisional Sourcing Decision’, indicating where insourcing could deliver potential benefits. Value for money, service quality, and social and economic value are all considered in further analysis before a final delivery model is approved.
The active pipeline illustrates an immediate real-world impact for these policy changes. The Cabinet Office’s first move: bringing cleaning and security services across 83 government buildings back in-house. That’s 2,000 outsourced roles pulled back into the public sector when current contracts end.
The risk for incumbent suppliers:
The introduction of PPN 024 means the critical sourcing decision is being pushed significantly upstream. If an authority concludes, during its early Public Interest Test, that it possesses the internal capacity or strategic mandate to run the service directly, the tender will never hit the market.
If your business operates in professional consultancy, facilities management, or business process outsourcing, the “automatic renewal” safety net is officially gone.
To protect your pipeline, reactive bidding is no longer viable. Suppliers must engage with buyers during the pre-market phase to demonstrate why a service requires specialist private-sector innovation, and why internal delivery presents a high operational or economic friction risk to the taxpayer.
The public sector still needs private suppliers, but the bar for entry has been raised. The private sector will need to be more strategic with pipelines, working with public sectors buyers to balance internal and external capability and rebuild public trust.
PPN 025: The AI Supply Chain: What the UK’s New National Security Procurement Guidance Means for Your Bids
The UK’s procurement landscape has shifted for suppliers operating in technology markets. PPN 025: Protecting the UK’s National Security Through Public Procurement provides new guidance to help contracting authorities consider national security interests when procuring in critical sectors, including artificial intelligence (AI), energy infrastructure, steel and shipbuilding.
While the national security exemption already exists within the Procurement Act 2023, PPN 025 provides greater clarity on when contracting authorities may consider using it and encourages earlier assessment of national security risks throughout the procurement lifecycle. The guidance also identifies AI as one of the sectors where supply chain resilience and strategic dependency considerations may be particularly important.
For AI suppliers, this could have significant implications. Contracting authorities are being encouraged to engage early with sector leads and consider national security requirements when developing procurement strategies. In some circumstances, authorities may determine that a procurement should not be subject to all of the usual Procurement Act procedures in order to protect national security interests.
This does not mean that public sector AI opportunities will disappear from the market or that suppliers face automatic exclusion. However, buyers are likely to place greater emphasis on supply chain visibility, operational resilience, security assurance and the ability to demonstrate confidence in critical technology dependencies. Suppliers that can clearly explain how their AI solutions are developed, hosted, maintained and secured may be better positioned to address emerging buyer concerns.
As a result, successful bidding strategies are likely to require more than simply responding to published opportunities. AI providers should consider reviewing their supply chains, understanding dependencies on third-party technologies, documenting security controls and engaging with public sector stakeholders early where appropriate. Demonstrating resilience, transparency and long-term reliability is becoming an increasingly important part of the value proposition for suppliers operating in nationally significant technology sectors.
For organisations pursuing public sector AI opportunities, PPN 025 signals a growing focus on the intersection of procurement, resilience and national security, and those that proactively align their market engagement and bid strategies with these priorities will be better placed to respond as government expectations continue to evolve.
PPN 026: the new Social Value model, why “Good British Jobs and Skills” are becoming a tender requirement.
The procurement landscape has shifted, once again, for suppliers targeting central government contracts, with the introduction of PPN 026: The Social Value Model. The third major shift in Social Value in the last two years, this PPN is designed to deliver British-based jobs, skills, and opportunities through public sector spending.
The government announced its intention that every pound spent through public procurement should support economic growth, strengthen local communities, and create employment opportunities across the UK. From 1st January 2027 all central government departments, executive agencies, and non-departmental public-bodies will have to ensure all procurements over £1mil align with the new model, Social Value is now becoming a core evaluation criterion.
The Social Value model has been significantly simplified, removing the wide range of outcomes and themes to focus on:
- Outcome 1: Good jobs offering fair pay and good working conditions, helping people to get a job, stay in work, and progress in their careers, with good employment opportunities across the country.
- Outcome 2: Skills and activities to address skills shortages, promoting skills development opportunities particularly to those who face barriers to employment or struggle to engage in the labour market.
Suppliers will be assessed on how they can promote economic security, innovation, wellbeing, financial wellbeing, and community opportunities through contracts. The landscape has shifted to focus firmly, and solely, on jobs and skills.
The PPN is also introducing mandatory weighting thresholds. Contracts valued between £1m and £5m will carry a minimum 10% social value weighting, while contracts worth over £5m will carry a minimum 20% weighting. For larger contracts, social value is becoming a more determining factor in contract awards.
What is the risk for you?
PPN 026 means that generic social value responses and standard commitments are likely to become less effective. Contracting authorities will expect suppliers to demonstrate how they will create tangible job and skills outcomes within the community; apprenticeships, workforce development, local recruiting, pay commitments, and supporting those facing barriers to work.
For SMEs and small businesses, Social Value can already be an excluder, and as the rules tighten it will only become harder to compete with large businesses. To remain competitive, you need to clearly evidence how your delivery model directly creates jobs, develops skills, and contributes to local economic growth. Reach out to us today to find out how we can help you shape your social value bid strategy and navigate the upcoming legislative changes.
Section 70: transforming public sector transparency
Section 70 of the Procurement Act 2023 came into effect earlier this year. This regulation mandates authorities upload quarterly reports to the Central Digital Platform detailing all procurements over £30,000 (inc. VAT). July 29th is the deadline for the first quarterly report under the new system, covering data from April to June.
This shifts the landscape for competitor intelligence and the way we plan public sector bids. Until the legislation change, when an organisation wins a major contract, their payment timelines and revenue flows remained confidential. We only ever saw the “potential value” stated in the award notice. Now the ambiguity has been removed, and the new platform will link each payment notice with the contract’s unique identifier and incumbent supplier, supporting a more transparent procurement system.
This means both bidders and competitors will be able to log onto a central, searchable registry and track:
- How much revenue incumbents are generating from a contract quarter-by-quarter.
- The precise pacing and scale of milestone deliveries.
- Significant anomalies or gaps in billing that might point to delivery delays or contract disputes.
The immediate risk for potential bidders is commercial exposure. If your bidding strategy relies on “buying” your way onto a framework through low upfront margins, with the plan to increase profitability during the contract via unpublicised contract modifications or backend pricing structures, this will be exposed under the new regulations.
Competitors will be able to analyse your delivery data, reverse-engineer your margins, and use that intelligence to frame their strategy for future bids and recompetes, significantly reducing incumbent advantage. Section 70 notices will sit alongside Section 69 (Prompt Payment Compliance) and Section 71 (KPI Performance Failures), essentially creating a live, public, performance and cash-flow dashboard for active contracts. The intention of this Section, and the wider Procurement Act reform, is to increase transparency, accountability, and flexibility in public sector procurement.
What Does This Mean For Future Bids?
The tactic of “win the bid/hide the delivery data” will no longer work. When you develop your pricing models for future bids you must bear in mind that your costs are very likely to be publicly available for scrutiny by the entire market – partners, competitors, and buyers. Commercial models must now be carefully structured, able to withstand public transparency and scrutiny.
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