Government Overhauls £90bn Public Procurement Rules to Prioritise Local Job Creation Over Green Targets

In a major policy shift aimed at tackling youth unemployment, the government is set to overhaul the UK’s £90 billion public procurement system by requiring companies bidding for public contracts to prioritize local job creation and skills over broad environmental and social goals.

Prime Minister Andy Burnham announced the changes as part of an effort to drive “growth in every postcode,” ensuring that public spending directly targets the nation’s youth unemployment crisis. Under the new rules, businesses competing for major government contracts will need to prove they are supporting young workers into employment and addressing regional skill shortages.

The Cabinet Office confirmed that the weighting given to a company’s community and social contribution will double from 10% to 20% on all government contracts worth £5 million or more.

Previously, this score was assessed against broad social value metrics, including net-zero compliance, diversity, and post-pandemic recovery efforts. The new 20% model will focus specifically on measurable economic opportunities:

• Jobs & Fair Pay: Extra credit will be awarded to bidders offering local jobs that pay above the minimum wage.
• Skills Development: Bidders must address regional skill shortages through structured training programs and apprenticeships.
• Youth Work Experience: Companies providing 45-day work experience placements for young people will gain a competitive advantage in the scoring process.

The update comes as official figures from the Office for National Statistics (ONS) reveal that over one million young adults aged 16 to 24 are currently not in education, employment, or training (NEET).

Government Support vs. Environmental Backlash

First Secretary of State Louise Haigh, who described the legacy procurement framework as a “tick-box exercise,” emphasized that every pound of taxpayer funds should deliver direct benefits to local communities. Cabinet Office Minister Mark Ferguson added that firms profiting from public taxpayer funds have a clear responsibility to give back through local employment.

However, environmental groups voiced strong concerns over replacing green targets with employment metrics. Greenpeace UK argued that environmental protection and youth employment are mutually beneficial, warning that holding companies to lower sustainability standards risks compromising climate targets.

Source / Reference: BBC News