Public procurement rules are set to be overhauled as ministers unveil their 10-year-plan for infrastructure this week.
The strategy to overhaul infrastructure over the next decade comes as Rachel Reeves has said the country’s schools and hospitals have been “left to crumble”.
The Treasury has promised hundreds of billions over the next decade for projects such as roads, railways and homes.
Under proposals put forward in a Cabinet Office consultation, public bodies would have to give more weight to firms which can prove they will boost British jobs when they are bidding for contracts.
The change is set to apply to major projects such as transport, as well as other schemes including hospital and school building.
Firms looking to work on public sector projects could also be rewarded if they can show benefits they will bring to a community, such as apprenticeships, opportunities for care leavers, or helping people into work.
Pat McFadden, the Chancellor of the Duchy of Lancaster, has said that the proposals will reward firms that “put money in working people’s pockets”.
“Whether it’s building roads, railways or schools, we want to open up opportunities on major infrastructure projects for firms that boost British jobs and skills,” he said.
“The new rules will deliver on our plan for change by rewarding companies that put money in working people’s pockets as we invest in the country’s future.”
According to the Treasury, the infrastructure strategy will lay out Government plans on prioritised policy areas such as upgrading transport networks, building new homes, modernising public services such as hospitals, and assisting the transition to green energy.
Ministers are pledging that at least £725 billion will be spent on infrastructure over the next 10 years.
The Chancellor outlined a raft of infrastructure investment as part of last week’s spending review.
According to Wednesday’s announcement, there will be £39 billion over the next 10 years to build affordable and social housing, and spending is due to reach £4 billion a year in 2029-30.
There was also a £30 billion commitment to nuclear power, including £14.2 billion to build the Sizewell C plant in Suffolk and £2.5 billion for small modular reactors, as well as £15 billion for public transport projects in England’s city regions and a four-year settlement for Transport for London worth £2.2 billion.
Ms Reeves said: “The British people voted for change – and this is how we deliver it. For too long, our infrastructure – our schools and hospitals, or our roads and bridges – have been left to crumble, holding back communities and stunting economic growth.
“This was a dereliction of duty by previous governments overseeing an era of managed decline, but it ends with this one.
“We are investing in Britain’s future, brick by brick, road by road and track by track.”
