The UK Government's Procurement Policy Note (PPN) 024 requires Central Government departments (and their ALBs) to conduct a Public Interest Test before commencing on any service procurement worth over £1 million.
This marks a significant step in the government's drive to promote insourcing across the public sector.
This quick article explains what PPN 024 is, what it requires in-scope procurement teams to do, and what it means for the public sector market and suppliers.
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Released in June 2026, PPN 024 (The Public Interest Test and Insourcing Strategy) sets out new requirements for in-scope procurement teams to assess whether large service procurements (worth over £1 million, inc. VAT) might be better delivered in-house.
PPN 024 also requires that large Central Government departments with an annual contract spend of over £100 million (inc. VAT) produce an Insourcing Strategy, covering a minimum of five years.
Procurement Policy Notes, or PPNs, are issued by the Cabinet Office to update public sector procurement teams on new policies, rules and practices they need to apply.
PPN 024 applies to Central Government departments, their Executive Agencies and Non-departmental Public Bodies.
The PPN does not apply to Local Government, NHS, private utilities or devolved authority procurement teams. The PPN states that other "public sector contracting authorities may wish to adopt the approach set out in this PPN and are encouraged to do so", but this is not required.
PPN 024 is part of the government’s wider push to promote insourcing across public procurement.
The Labour government has been critical of the public sector’s reliance on outsourcing, particularly in areas such as management consultancy.
The Cabinet Office argues that insourcing can help ensure public resources are used for public benefit, while improving accountability and strengthening government capacity.
The Public Interest Test is a pre-procurement assessment developed to determine whether a service might be better delivered in-house. It is designed to take place at the Strategic Outline Case stage, before a procurement formally begins.
It is composed of two parts:
This is broken down into by evaluating whether an insourced solution would: deliver better value for money; provide a greater opportunity to promote social value; avoid operating in an uncompetitive or unpredictable market, or provide an opportunity to promote economic growth.
If the authority has determined in part one that a service is a good candidate for insourcing, they must next determine if they have the financial and operational capacity to do so.
The Test produces a Provisional Sourcing Decision. This may recommend outsourcing, insourcing, or conclude that the service could be suitable for insourcing but the authority is not yet ready to deliver it internally.
The Cabinet Office anticipates that the Test will take at most two days to complete for more complex procurements.
All Public Interest Tests must be submitted to the Government Commercial Agency within 30 days of the end of each calendar quarter.
For full guidance on the Test, please refer to the Cabinet Office's explainer.
From 1 April 2027, in-scope public bodies must complete a Public Interest Test before starting any planned service procurement, including re-procurements, worth more than £1 million, including VAT.
The requirement applies to procurements awarded under the Procurement Act 2023. It does not apply where, before the commencement date, the authority has already completed a Strategic Outline Case, Delivery Model Assessment or equivalent review.
PPN 024 does not apply to below-threshold procurements, goods contracts or works contracts.
Contracts excluded from PPN 024 include (but are not limited to):
Direct awards made under Section 41 of the Act (contracts awarded under extreme urgency, for prototypes, repeat requirements, etc. with the exception of the justification specified in Paragraph 6 of Schedule 5, absence of competition for technical reasons)
Direct awards made under Section 42 (contracts awarded to protect life or public safety)
Defence and Security contracts (as defined by the Act)
Procurements solely to establish a framework or Dynamic Market
For the full list of exemptions, read the full PPN.
PPN 024 requires that Central Government departments with an annual contract spend exceeding £100 million (inc. VAT) must produce an Insourcing Strategy.
The Strategy is intended to identify opportunities for insourcing over the coming five years. Strategies should include reflections on:
The authority's current service deliveries - and, of these, which may be suitable for insourcing. The Cabinet Office describes services that require high transparency, direct control, uninterrupted delivery, or that are subject to volatile or unpredictable changes as suited to insourcing.
Candidates for insourcing potential. The Cabinet Office suggests that services with a "high insourcing potential" include those that are:
Difficult to specify in advance or whose scope regularly fluctuates;
Highly prescriptive, where a supplier likely couldn't add value;
"Uniquely governmental", making them inherently difficult for suppliers to provide without excessive premiums;
Operating in markets characterised by monopolies, high barriers to entry, or a lack of competition;
Shown to generate excessive profits for suppliers, without evidence of driving cost efficiencies.
The Strategy should also include an assessment of how insourcing services would improve service delivery or cost-effectiveness, and the steps needed to make insourcing operationally feasible.
The PPN states that in-scope departments' Insourcing Strategy must be published within 30 days of April 1st 2027.
For more information on Insourcing Strategies, consult the Cabinet Office's full guidance.
PPN 024 could mark a major shift in Central Government procurement.
For many services, outsourcing has become the default. Tussell analysis shows that direct government spending with suppliers grew by 29% between 2019 and 2024, above inflation of 24% over the same period (according to the Bank of England’s inflation calculator).
Public Interest Tests may encourage procurement teams to challenge that default. Over time, insourcing could help reduce unnecessary spending, strengthen internal capability and build greater operational resilience.
Procurement teams should start identifying which services and incumbent contracts may be suitable for insourcing. They should also assess what it would take to deliver those services in-house, including the cost, capacity and operational complexity of moving away from existing suppliers.
From April 2027, Public Interest Tests and Insourcing Strategies will also add another administrative requirement. Teams will need clear processes, training and evidence-gathering methods to complete the Tests consistently and at scale.
A component of the Tests requires your team to understand how competitive a given services' market is. This can be tricky without hard data on your side. Tussell's market intelligence can help you scope out the size, direction and competitiveness of your key procurement categories. Head here to learn more.
PPN 024 may concern suppliers because it encourages authorities to consider insourcing before going to market.
From April 2027, suppliers seeking large contracts may need to make a clearer case for why outsourcing still delivers the best outcome. That means showing how they provide better value for money, stronger service quality, specialist expertise or lower delivery risk than an in-house model.
Suppliers should also review their existing Central Government contracts. Which services are performing well? Which are under pressure? Which could an authority realistically bring in-house? Understanding that exposure now will help teams assess the commercial risk of future insourcing decisions.
Early pipeline visibility will also become more important. If a supplier can anticipate when an authority is likely to run a Public Interest Test, it can engage earlier and shape the case for outsourcing before a sourcing decision is made.
Tussell’s Early Opportunities feed helps suppliers spot these early buying signals. Head to our website to see how it works.
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PPN 024 marks a clear shift in emphasis for Central Government procurement.
However, its impact will depend on how seriously departments apply the Public Interest Test and their Insourcing Strategies.
It's possible that for some time-strapped procurement teams, PPN 024 might merely become another administrative hurdle before going to market anyway. However, the new policy does provide teams with the authority to begin a significant wave of insourcing across government. The ultimate outcome remains to be seen.
Whatever the ultimate outcome, buyers and suppliers should start reviewing their service lines ahead of April 2027. Procurement teams will need to identify where insourcing may be viable. Suppliers will need to understand which contracts are most exposed and how they can prove the value of outsourced delivery.
We have a whole series of PPN explainers - click here to access them.
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No. PPN 024 does not ban outsourcing. It requires in-scope authorities to assess whether a service could be better delivered in-house before going to market. In most cases, outsourcing will likely still be judged the best option, especially where suppliers can demonstrate specialist expertise, stronger delivery capability or better value for money.
Suppliers delivering large, recurring service contracts to Central Government are likely to face the most scrutiny. Risk may be higher where a service is expensive, difficult to specify, highly sensitive, delivered through a weak supplier market, or seen as something government should be able to do itself.
The policy could be most relevant to service areas where government relies heavily on external providers, such as consultancy, professional services, business support, digital delivery, operational services and facilities management. However, the actual impact will depend on whether departments believe they have the capability, budget and operational capacity to bring services in-house.
No. A Public Interest Test produces a provisional sourcing decision. It may conclude that a service should still be outsourced, that it should be insourced, or that it is a good candidate for insourcing but the authority is not yet ready to deliver it internally.
Suppliers should review their Central Government service contracts and identify which, if any, may be vulnerable to insourcing. If possible, they should prepare strong evidence on value for money, performance, innovation, risk reduction and specialist capability. They should also monitor upcoming expiries and early procurement signals and engage with buyers early, before sourcing decisions are finalised.
Procurement teams should map upcoming service procurements that could fall within scope from April 2027. They should also identify incumbent contracts that may be suitable for review, build a repeatable process for completing Public Interest Tests, and gather evidence on supplier performance, market competitiveness and internal delivery capacity.
Market intelligence helps authorities judge whether outsourcing is still in the public interest. Buyers may need evidence on how competitive a supplier market is, which providers are active, how prices are changing, how similar authorities are buying, and whether incumbent suppliers are delivering good value.