PPN 024: The Public Interest Test and Insourcing Strategy · first published 17 June 2026
PPN 024 introduces two new requirements for central government departments, their executive agencies, and non-departmental public bodies (NDPBs) — collectively called 'in-scope organisations'. First, before starting any procurement (including re-procurements) worth over £1 million including VAT, they must complete a 'Public Interest Test' that formally evaluates whether delivering the service in-house is a viable option. Second, organisations spending £100 million or more per year on contracts must publish a five-year Insourcing Strategy by 1 May 2027. Both requirements kick in from 1 April 2027 and apply only to new or re-competed work — not projects already past a Strategic Outline Case or equivalent stage. Other public-sector bodies are encouraged but not required to follow the same approach. For suppliers, this means buyers will be explicitly and formally considering insourcing as an alternative before every significant procurement begins.
WHO THIS APPLIES TO
THE ENKII VIEW
This PPN shifts the starting assumption in central government: insourcing is now a formally evaluated option before every significant procurement, not an afterthought. For SMEs, the risk is that some contracts — particularly where the government judges it can rebuild in-house capability — may not come to market at all, or may be delayed while the Test is completed. The opportunity is the reverse: where a Public Interest Test concludes that the market should deliver, buyers will have documented why, potentially making the eventual tender more focused and better scoped — which tends to favour agile SMEs over large incumbents.
1. Build in a potential delay to your pipeline: from April 2027, every new central government procurement over £1m must pass through a Public Interest Test before it launches. Factor in extra lead time when planning bid resources and cashflow.
All SMEs bidding for central government service contracts >£1m — The PPN requires the Test to be completed 'prior to commencing any planned project' — this adds a formal pre-procurement stage that could push tender launch dates back.
2. When tracking contract expiry dates, check whether the incumbent contract will be caught by the April 2027 start date. If the re-procurement has not yet reached Strategic Outline Case stage by then, a Public Interest Test must be run first — the buyer may delay re-tender while that test is completed.
SMEs targeting re-competitions of existing central government contracts — The PPN states the Test 'applies only to new planned projects and re-procurements' and is not required only where a Strategic Outline Case or equivalent has already been completed before 1 April 2027.
3. Sharpen your value proposition beyond cost. Prepare materials that articulate why your firm delivers outcomes, specialist skills, or resilience that a government team cannot easily replicate — ready to address buyer questions that arise from the Public Interest Test process.
SMEs bidding for central government contracts in sectors where in-house capability could realistically be rebuilt — The PPN explicitly states the Test encourages buyers to assess 'rebuilding state capability' and to go 'beyond simple cost comparisons to actively take into account wider government objectives alongside key economic and social goals' — so pure price competitiveness is no longer sufficient.
4. From May 2027, monitor the published five-year Insourcing Strategies of large central government departments (those spending ≥£100m/year on contracts). These will signal which services are being considered for insourcing — giving you early warning to diversify or strengthen your pitch for those contracts.
SMEs wanting advance sight of which services central government may insource — The PPN requires in-scope organisations with annual contract spend of £100m+ to 'develop and publish a five-year Insourcing Strategy within 30 days of 1 April 2027'.
5. Check whether your framework was established after a Public Interest Test that concluded in favour of a framework or dynamic market. If so, your call-off contracts for the same service are exempt from further Tests — use this as a selling point with buyers who may be uncertain about whether a new Test is needed.
SMEs supplying services via call-off contracts under existing central government frameworks — The PPN states that 'subsequent call-off contracts will not require further Tests, provided the call-off is for the same service' where the original Test concluded in favour of a framework or dynamic market.
Every rule below quotes the official document verbatim.
PPN 024 applies only to central government departments, their executive agencies and non-departmental public bodies ('in-scope organisations'); wider public sector bodies are encouraged but not required to adopt it. (Central government departments, executive agencies, NDPBs)
“This Procurement Policy Note (PPN) applies only to, central government departments, their executive agencies and non-departmental public bodies. Such bodies are referred to as 'in-scope organisations'. Other public sector contracting authorities may wish to adopt the approach set out in this PPN and are encouraged to do so.”
The Public Interest Test is required for any planned project or re-procurement with an estimated value of more than £1 million including VAT that may result in a public contract under the Procurement Act 2023. (In-scope organisations, contracts >£1m inc VAT)
“The Public Interest Test applies prior to commencing any planned project, including re-procurements, for a service with an estimated value of more than £1 million (including VAT), that may result in the award of a public contract under the Procurement Act 2023”
Public Interest Tests must be applied from 1 April 2027, for new planned projects and re-procurements only — not projects that have already completed a Strategic Outline Case or equivalent internal governance stage by that date. (In-scope organisations, from 1 April 2027)
“Public Interest Tests should be applied from 1 April 2027. This requirement applies only to new planned projects and re-procurements. It is not required for in-progress projects that, at the date of commencement, have already completed a Strategic Outline Case, Delivery Model Assessment, or equivalent internal governance stage.”
In-scope organisations that spend £100 million or more per year on contracts must develop and publish a five-year Insourcing Strategy within 30 days of 1 April 2027 (i.e. by 1 May 2027). (In-scope organisations with annual contract spend ≥£100m inc VAT)
“Develop and publish a five-year Insourcing Strategy within 30 days of 1 April 2027, where the organisation has an annual contract spend of £100 million (including VAT) or more.”
Outcomes of all Public Interest Tests must be recorded using a quarterly reporting template and submitted to the Government Commercial Agency (GCA) within 30 days of the end of each calendar quarter; the first return covers 1 April 2027 to 30 June 2027, due by 30 July 2027. (In-scope organisations, from 1 April 2027)
“Record the outcomes of all Public Interest Tests using the provided quarterly reporting template and submit this return to the Government Commercial Agency within 30 days of the end of each calendar quarter. The first return will cover the period from 1 April 2027 to 30 June 2027 and is due by 30 July 2027.”
Direct award contracts under Section 41 of the Procurement Act 2023 (urgent/special cases) are exempt from the Test, except where the justification is absence of competition for technical reasons (Schedule 5, paragraph 6). (In-scope organisations)
“Direct award contracts made under Section 41 of the Act (which permits direct awards for special cases including extreme urgency, prototypes, exclusive rights, repeat requirements, commodities, insolvency, and user choice contracts), with the exception of the justification laid out in paragraph 6 of Schedule 5 (absence of competition for technical reasons)”
Procurements solely to establish a framework or dynamic market are exempt from the Test; subsequent call-off contracts under that framework are also exempt provided they are for the same service. (In-scope organisations)
“Procurements solely to establish a framework or set up a dynamic market; or If after conducting a Public Interest Test, the final sourcing decision was to establish a framework or dynamic market, subsequent call-off contracts will not require further Tests, provided the call-off is for the same service.”
Service contracts whose primary object is the provision of services delivered outside the UK are exempt from the Public Interest Test. (In-scope organisations)
“Service contracts whose primary object is the provision of services delivered outside of the UK”
The Public Interest Test requires a broader value-for-money assessment that goes beyond cost comparisons to include wider government objectives and key economic and social goals. (In-scope organisations conducting Public Interest Tests)
“It provides a methodology for practitioners to evaluate internal delivery models, ensuring that sourcing decisions move beyond simple cost comparisons to actively take into account wider government objectives alongside key economic and social goals.”
This briefing is enkii's interpretation of the official document — the official text always governs.
Source document © Crown copyright, reused under the Open Government Licence v3.0 via the GOV.UK Content API. enkii tracks every Procurement Policy Note and briefs changes the day they land — see all briefings.