This Procurement Policy Note (PPN) introduces a new Public Interest Test for certain central government service projects, requiring organisations to consider whether services could be delivered in-house before proceeding with a procurement.
From 1 April 2027, the Test will apply to planned projects and re-procurements for services with an estimated value of more than £1 million including VAT. Several categories of procurement are exempt from the Public Interest Test, including certain direct awards, exempt contracts and some defence and health procurements.
For suppliers, this means some services may be considered for insourcing before an external procurement begins.
PPN 024 establishes a framework for assessing whether in-house delivery may offer better public value than external procurement.
The policy introduces a Public Interest Test to assess the potential for insourcing before certain planned projects and re-procurements begin. It is intended to encourage a broader assessment of value for money, service quality, resilience and wider economic and social considerations rather than focusing primarily on the cost of external delivery.
PPN 024 also introduces a requirement for central government organisations with annual contract spend of £100 million or more to develop and publish a five-year Insourcing Strategy.
From 1 April 2027, central government departments, executive agencies and NDPBs must conduct a Public Interest Test before commencing certain new projects and re-procurements for services valued above £1 million including VAT. The Test considers whether a service could be better delivered in-house.
Organisations with annual contract spend of £100 million or more must also develop and publish a five-year Insourcing Strategy.
PPN 024 does not substantially change the procurement process for opportunities that proceed to market, but it may affect whether some services are procured externally in the first place.
Its main potential impact is that some services may be assessed for insourcing before being taken to market, which could reduce the number of external procurement opportunities in some areas. However, the Test does not automatically mean a service will be insourced. Where a decision is made to procure externally, the procurement must still be conducted in accordance with the Procurement Act 2023.
The publication of five-year Insourcing Strategies could also give suppliers useful insight into where central government organisations are considering developing internal capability, helping suppliers understand potential changes to future demand.
This article provides a supplier-focused summary of PPN 024. The Government publications remain the authoritative source for the full requirements and guidance. Official PPN:
PPN 024: The Public Interest Test and Insourcing Strategy – GOV.UK
Guidance: Insourcing and the Public Interest Test – Guidance Note – GOV.UK
