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

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 £5,000

If the value of the contract is £5,000 or less, we apply the following principles:

• We consider the use of a purchasing card below £500
• We apply 'Think Local'. This means that preference will be given to local suppliers where they exist, providing they offer Value for Money
• We test the market by getting at least three written quotes to demonstrate Value for Money

Contract value is between £5,001 and £50,000

If the value of the contract is between £5,001 and £50,000, we apply the following principles:

• We apply 'Think Local'. This means that preference will be given to local suppliers where they exist, providing they offer Value for Money
• We consider the Social Value policy
• We test the market by getting at least three written quotes to demonstrate Value for Money

Contract value is between £50,001 and £100,000

If the value of the contract is between £50,001 and £100,000, we apply the following principles:

• We apply 'Think Local'. This means that preference will be given to local suppliers where they exist, providing they offer Value for Money
• We must apply the Social Value policy
• We test the market by getting at least three written tenders to demonstrate Value for Money

Contract value is between £100,001 and the financial threshold

If the value of the contract is between £100,001 and the financial threshold, we apply the following principles:

• We must advertise the contract
• We obtain at least three written tenders
• We must apply the Social Value Policy

Contract value is above the financial threshold

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

• We advertise the contract in line with the Public Procurement Regulations
• We enforce timelines that work alongside procurement regulations
• We obtain at least three written tenders
• We must apply the Social Value Policy