Louise Haigh, the first secretary of state, announced that the government will stop requiring companies to prove they are improving social and environmental wellbeing in order to secure contracts. Instead, firms will need to demonstrate how they can create jobs and offer training specifically for young people. This marks a significant shift in public sector procurement priorities.
£90bn allocated annually to promote job creation and skills
The policy change affects the £90bn the UK government spends annually on public sector contracts. Previously, 10% of procurement decisions accounted for the social value of a contract. Under the new approach, this weight has been doubled to 20%. But the criteria have shifted from assessing a company's social and environmental impact to evaluating its capacity to boost employment. This includes jobs that offer above the minimum wage, provide training, offer work experience, or help fill local skills shortages. The government claims this will direct taxpayer money toward meaningful job creation across the UK.
Environmental groups warn of potential trade-offs
The decision to prioritize job creation over environmental criteria has drawn criticism from green groups, who argue that the move could compromise efforts to protect the environment. Ami McCarthy, head of politics at Greenpeace UK, emphasized that environmental and job creation goals should not be pitted against each other. She said that companies should be held to both climate and social responsibilities to ensure a sustainable future.
Rosie Downes, head of campaigns at Friends of the Earth, echoed these concerns. She pointed out that while creating good local jobs is essential, it should not come at the expense of environmental protection. Downes highlighted the urgent need for action to address climate risks. Noting the UK is on track for a record number of heat-related deaths this summer. She added that the natural world is rapidly deteriorating.
Sarah Williams, director of strategic partnerships at Green Alliance, acknowledged the pressing issue of youth unemployment but cautioned against removing climate and sustainability requirements. She argued that companies should still meet environmental targets while supporting job creation. According to Williams, the UK is facing a growing youth unemployment crisis, and the solution should not come at the cost of climate action.
Smaller companies gain an advantage with exemptions
The government has introduced exemptions for contracts valued at under £1m, which it hopes will help smaller businesses compete more effectively. By reducing bureaucratic barriers, the policy aims to level the playing field and allow local firms greater access to public sector contracts. A Labour source noted that the current requirements for social value were often seen as an unnecessary form of red tape rather than a meaningful evaluation tool.
Despite the exemption, the government acknowledges the policy will likely face criticism from anti-trafficking and equality advocates. These groups may view the shift as neglecting important social metrics that go beyond job creation, such as inclusivity and human rights. The decision to refocus procurement criteria could also lead to a broader debate about the trade-offs between different aspects of social value.
Under the new framework, suppliers will be assessed based on their willingness to support British jobs and develop skills. Particular attention will be paid to how effectively companies can help groups such as young people not in education, employment, or training (Neets). Care leavers and individuals with long-term health conditions will also be considered. The government hopes this will generate real, long-term benefits for communities instead of just superficial progress on paper.