Guidance: PPN 024: The Public Interest Test and Insourcing Strategy

1. Sourcing decisions can critically impact the quality of public services and the successful delivery of government objectives. Insourcing can be a crucial mechanism for enhancing value, control and resilience.

2. To achieve a fundamental shift in how public sector organisations evaluate their service delivery models, a new approach is required to guarantee that the viability of internal delivery is explored consistently.

3. Historically, sourcing decisions have been made on a contract-by-contract basis. However, effective sourcing of public services requires contracting authorities to take a longer-term approach and build the necessary capability and capacity to consider delivering the service directly.

4. 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.

5. 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, with the following exceptions:

a. 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);

b. Direct award contracts made under Section 42 of the Act (which permits direct awards necessary to protect life or public safety);

c. Exempted contracts under Schedule 2 of the Act;