Understanding financial thresholds

When applying to provide goods, works or services, you will see the terms above and below 'thresholds' when describing the value of a contract. Use this page to understand what the thresholds are and how they affect the procurement process.

Financial thresholds as of January 2026

Type of contract	Threshold including VAT	Threshold before VAT
Works contracts and concession contracts	£5,193,000	£4,154,400
Supplies and/or services for local government	£207,720	£166,176
Social and other specific services	£663,540	£530,832
Healthcare services	No threshold	No threshold

How financial thresholds affect the procurement process

As a local authority, we have to follow different processes when procuring contracts depending on their financial value.

Contract value is up to £4,999

If the value of the contract is £4,999 or less, we apply the following principles:

• We consider the use of a purchasing card below £500

Contract value is between £5,000 and £49,999

If the value of the contract is between £5,000 and £49,999, we apply the following principles:

• We consider the Social Value Policy
• We obtain a single quote that demonstrates value for money where appropriate

Contract value is between £50,000 and the goods and services financial threshold

If the value of the contract is between £50,000 and the goods and services financial threshold, we apply the following principles:

• We must apply the Social Value Policy
• We test the market by inviting at least three written quotes or tenders to demonstrate value for money, using the council’s e-tendering system

Contract value is above the goods and services financial threshold

If the value of the contract is above the goods and services financial threshold, we apply the following principles:

• We advertise the contract in line with public procurement regulations
• We enforce timelines that work alongside procurement regulations
• We invite at least three written tenders where possible
• We must apply the Social Value Policy

How financial thresholds affect the procurement process for works or concessions contracts

Contract value is up to £49,999 

If the value of the contract is up to £49,999, we apply the following principles:

• We consider the Social Value Policy
• We obtain a single quote that demonstrates value for money where appropriate
• All works contracts must include a schedule of works, risk assessment and CDM responsibility

Contract value is between £50,000 and £499,999 

If the value of the contract is between £50,000 and £499,999, we apply the following principles:

• We must apply the Social Value Policy
• We test the market by inviting at least three written quotes or tenders to demonstrate value for money, using the council’s e-tendering system
• All works contracts must include a schedule of works, risk assessment and CDM responsibility

Contract value is between £500,000 and the works and concessions financial threshold 

If the value of the contract is between £500,000 and the works and concessions financial threshold, we apply the following principles:

• We must apply the Social Value Policy
• We test the market by running an advertised (open) tender process to demonstrate value for money, using the council’s e-tendering system
• All works contracts must include a schedule of works, risk assessment and CDM responsibility

Contract value is above the works and concessions financial threshold 

If the value of the contract is above the works and concessions financial threshold, we apply the following principles:

• We advertise the contract in line with public procurement regulations
• We enforce timelines that work alongside procurement regulations
• We must run a process as prescribed by the relevant public procurement law
• We must apply the Social Value Policy
• All works contracts must include a schedule of works, risk assessment and CDM responsibility

How financial thresholds affect the procurement process for social and other specific services (light touch services as defined by PA23)

Contract value is up to £49,999 

If the value of the contract is up to £49,999, we apply the following principles:

• We consider the Social Value Policy
• We obtain a single quote that demonstrates value for money where appropriate

Contract value is between £50,000 and the light touch services threshold 

If the value of the contract is between £50,000 and the light touch services threshold, we apply the following principles:

• We must apply the Social Value Policy
• We test the market by inviting at least three written quotes or tenders to demonstrate value for money, using the council’s e-tendering system

Contract value is above the light touch services financial threshold 

If the value of the contract is above the light touch services financial threshold, we apply the following principles:

• We advertise the contract in line with public procurement regulations
• We enforce timelines that work alongside procurement regulations
• We invite at least three written tenders where possible
• We must apply the Social Value Policy

How financial thresholds affect the procurement process for healthcare services (as defined by the Provider Selection Regime)

There are no financial thresholds for the procurement of healthcare services. For contracts at all values, we must run a process as prescribed by the Health Care Services (Provider Selection Regime) Regulations 2023.