The UK government plans to stop requiring companies to prove they care about the environment before they can win government contracts. Instead, companies will need to show they are helping young people find work. The Guardian

The change was announced by First Secretary of State Louise Haigh on August 4, 2026. It affects how the government decides which companies get public contracts — agreements where government bodies pay private companies to provide goods or services. Every year, the UK spends about £90bn of taxpayers' money on these contracts.

When the government picks a company for a contract, part of the decision is based on something called "social value" — the positive impact a company has on society beyond just doing the job. Under the new rules, social value will count for 20% of the decision, up from 10%. But what counts as social value will change. Instead of rewarding companies for protecting the environment or promoting equality, the government will reward companies for creating jobs for young people.

Contracts worth less than £1m will not have to meet the job-creation requirement. Ministers say this will make it easier for smaller companies to compete for government work, because Haigh argued that smaller firms are often shut out by the paperwork the current rules require.

The policy comes at a time when youth unemployment is a serious problem. NEET stands for "not in education, employment, or training" — it describes young people who are not in school, not working, and not in a training program. In a survey done for the UK's Youth Employment Review, 84% of NEET young people said they want to find a job, education, or training. gov.uk The government's own Clean Energy Jobs Plan, published in October 2025, already promised to help young people get into careers in growing fields, including clean energy, through a program called the Youth Guarantee and through procurement measures. gov.uk

Environmental groups reacted quickly. Greenpeace UK, Friends of the Earth, and Green Alliance all said that creating jobs should not mean giving up on protecting the environment. Anti-trafficking and equality campaigners are also expected to raise concerns, according to the Guardian's reporting. A Labour source said the government knows it will face criticism for removing some of the current social value measures.

The question this raises is whether helping young people find work and protecting the environment have to be done one at a time, or whether they can be done together. Other countries and international groups have shown they can be combined. The Green Jobs for Youth Pact, launched at COP27 (the UN climate summit held in Egypt in 2022), is run by the International Labour Organization (ILO), UNEP, and UNICEF. It promotes green jobs for young people in sectors that have a big impact on the environment. UNEP The ILO estimates that shifting to a green economy could create 8.4 million jobs for young people. ILO Canada's Green Jobs program, updated in April 2026, gives funding to employers who hire, train, and mentor young people aged 15 to 30 for up to 12 months in climate-related sectors. Canada.ca

These programs treat youth employment and the green transition as one combined goal. The UK's new rules, by contrast, pull them apart. The social value portion of the contract decision gets bigger, but the environmental criteria that used to be part of it are removed entirely. Whether the Clean Energy Jobs Plan's promise to guide young people into clean-energy careers can still work without green requirements in government contracts is a question that the policy's rollout will have to answer.

For companies that bid on government contracts, the changes matter in practical ways. The social value portion doubling from 10% to 20% means that factors beyond price will carry more weight in deciding who wins, not less. But what counts as social value gets narrower. Companies that used to win points by cutting carbon emissions, protecting wildlife, or making sure their supply chains were ethical will now need to focus their proposals on showing they can hire young people. The £1m cutoff creates two different markets: below that line, smaller companies face lighter rules; above it, the full job-creation requirement applies.

The political logic here is straightforward. Youth unemployment is something voters feel directly and care about right now. Environmental rules in government contracts, while important to campaigners, are harder for voters to see in their daily lives. A government choosing between the two has signalled which group it thinks matters more right now. The risk, as environmental groups put it, is that the £90bn the government spends each year on contracts — one of the biggest spending tools any UK government has — no longer pushes toward the country's promise to reach net zero, meaning cutting greenhouse gas emissions as close to zero as possible.

What is still unclear is whether the two goals can be brought back together when the government writes the detailed guidance for how these rules will actually work. The Clean Energy Jobs Plan suggests the government's own strategy sees clean energy as a way to create jobs for young people. But the new contract rules do not yet connect those two ideas. Whether ministers will issue additional guidance linking the job-creation requirement to clean-energy and other growing sectors will determine whether this policy looks like a genuine change of priorities or simply a new label for goals the government already had.