Winning a government contract could soon depend on whether a small business offers a work placement to a young person, not just on its price or the quality of its bid.
That’s the plan set out by Prime Minister Andy Burnham, who told podcast host Jimmy McLoughlin that social value procurement rules will increasingly reward suppliers who take on 45-day youth placements, in an episode of Jimmy’s Jobs of the Future recorded at 10 Downing Street.
Described by the host as the Prime Minister’s second interview since entering No 10, it’s one of his first substantive comments on how he intends to use public spending to tackle youth unemployment.
Social Value Procurement and the 45-Day Placement
Pointing out how similar efforts worked while he was mayor of Greater Manchester, Burnham said his team secured “1,000 extra placements just by persuasion” from local employers last year, a figure he has attributed to direct outreach rather than any change in the rules themselves.
He made a similar case for social value at the National Social Value Conference in 2021, describing how Greater Manchester’s approach to homelessness had produced a 10% drop in rough sleeping within a year, and argued the same strategy needed to be adopted “on a much bigger scale.” He returned to that argument in a speech at the People’s History Museum shortly before entering Number 10, committing to “proper social value weighting” on all eligible public contracts.
Mayors Gain Ground on Youth Employment Funding
That procurement plan arrived in the same week as a separate announcement from Downing Street, which confirmed mayors will be handed a share of income tax and control over funding and employment support for 16 to 19-year-olds, as part of a wider devolution package.
“I know what it’s like to be ignored by politicians in Westminster,” Burnham said in that announcement. “I’m not going to make that same mistake now I’m PM.”
Together, the two announcements put both the money and the rules for creating youth placements in the hands of the same regional mayors, rather than leaving either with Whitehall – control Burnham has said he wants to use the way he did in Greater Manchester, where his team secured extra placements.
Why Winning Government Contracts Is Still Hard for Small Businesses
For small businesses that might benefit from this shift, the more immediate problem is takeup for applying for public contracts in the first place. Only 9% of small businesses have bid for a UK government contract in the past three years, according to a Federation of Small Businesses (FSB) report published in December 2025, and 62% say finding a suitable contract to bid for is difficult, with 27% calling it very difficult. Almost a third (31%) hadn’t won a single tender in three years at the time the survey was carried out.
“Public procurement has a huge potential to drive growth, create jobs and deliver better value for taxpayers, but right now, that potential is being squandered,” said Tina McKenzie, the Federation of Small Businesses’ policy chair, when the report was published, pointing out that without adequate support, the process “can feel like a soul-destroying maze of portals, forms, and silence”.
What Ring-Fencing Would Mean for Small UK Businesses
There’s also the issue of existing caution around how the expansion of youth-focused incentives are designed, especially given the scale of the unemployment crisis for young people. According to the FSB, around 30% of small employers said they had recruited fewer young workers because of April’s rises to the National Living Wage and National Insurance Contributions, while more small businesses reported cutting staff than increasing headcount.
Speaking to Employment Hero, Polly Dhaliwal, Chief Operating Officer of Enterprise Nation, made a related point about proportionality in relation to the broader youth employment debate.
The Milburn Review, she noted, estimated that youth economic inactivity already costs the UK £125 billion a year and could reach 1.25 million inactive young people within five years without reform. Her view is that the response doesn’t need to mean every small business running a formal placement programme.
“It’s flexible opportunities, a short placement, a few hours of mentoring a month, or helping someone start their own business, provided the support is practical and proportionate,” she said.
What the Data Shows About Where the Opportunities Are
Kevin Fitzgerald, UK Managing Director at Employment Hero, said the scale of the youth unemployment problem makes Burnham’s focus welcome, even if the details still need to be worked out.
“With over 1 million young people not in education, employment or training (NEET) in the first quarter of 2026 alone, it’s encouraging to see that Andy Burnham is prioritising employment,” he said. “Young people across the UK need more opportunities to build experience and kickstart their careers, so any future regional plans to help bolster communities up and down the UK is a positive. It’s important that any strategy works for the whole of the UK, as we know that the jobs market recovery is likely to be uneven across the country.”
Employment Hero’s platform June data, which tracks hiring activity across UK SMEs, backs up that concern about unevenness. London has seen a recent resurgence in hiring, up 4% quarter-on-quarter, but Fitzgerald said the longer-term trend tells a different story: “it’s small businesses right across the nation who have been providing job opportunities, despite employment costs and the regulatory burden rising.” Employment in the north is up 4.6% year-on-year”.
“This tells us that regional businesses are committed to growth and there are real opportunities out there for young people,” Fitzgerald said. “That progress is encouraging, but it’s not happening under easy conditions.”
Employment Hero’s research found that well over half of UK businesses believe employing staff has become more complex over the past year, and more than a third have scaled back full-time hiring as a result.
“If that pressure continues, it risks limiting the opportunities available to the next generation,” Kevin added. “Addressing it will take a more joined-up approach, bringing together SMEs, educators, parents and local policymakers to make employment more accessible and sustainable.”
Whether Burnham’s placement plan and the devolution of funding to mayors reach these small businesses, or continue to flow mainly to the suppliers already equipped to navigate public procurement, remains to be seen. Either way, it will shape how much of the ambition set out this week translates into contracts, and jobs, small businesses can deliver.
