Insourcing gets a gate: what PPN 024 really asks of commercial teams before 2027
For years the honest description of most sourcing decisions in government was that the market option was the default and insourcing was the thing nobody had time to model. PPN 024 attacks that directly. From 1 April 2027, in-scope central government bodies must run a Public Interest Test before commencing planned services projects and re-procurements estimated above £1 million including VAT, report the outcomes quarterly, and, if they spend £100 million a year or more on contracts, publish a five year Insourcing Strategy. The gate is new. The capability to walk through it is what most organisations do not yet have.
The dates are further away than they look
April 2027 sounds comfortable until you work backwards. The Insourcing Strategy has to be completed by 1 April 2027 and published within 30 days. A credible five year strategy needs contract expiry data, spend analysis by service, an honest read on internal capability, and executive sign off. That is a year of work, not a quarter.
The Test timing has its own subtlety. It is not required for in-progress projects that have already completed a Strategic Outline Case, Delivery Model Assessment or equivalent internal governance stage at the date of commencement. So the decision teams face now is which projects to push through that gate before the requirement bites, and which are better tested properly.
Reporting starts immediately after. The first quarterly return covers 1 April to 30 June 2027 and is due by 30 July 2027, going to the Government Commercial Agency, with the organisation responsible for redacting sensitive material. Thirty days is not long to assemble a return from scratch across a large department.
The exceptions list is where the work actually lands
PPN 024 has an unusually detailed exceptions list: direct awards under section 41 with a carve back for the technical reasons justification in paragraph 6 of Schedule 5, direct awards under section 42 to protect life or public safety, Schedule 2 exempted contracts, original equipment manufacturer defence and security services, services delivered outside the UK, certain exempted health procurement, some research and evaluation work, and procurements solely to establish a framework or dynamic market.
Detailed exceptions produce a predictable behaviour: teams under time pressure look for one that fits. That is fine when it genuinely applies and corrosive when it does not, because the reason for exception is exactly the kind of thing a quarterly return makes visible over time.
The most useful exception is the one that rewards good strategy. If a specific individual service requirement has already been explicitly appraised in the Insourcing Strategy with similar rigour to the Test, a separate Test is not needed. Organisations that invest properly in the Strategy buy themselves less repeated work later.
Cost comparison is not the answer the note wants
The background section contains the sharpest line in the document: government assessments of value for money have often focused too narrowly on the cost element of service delivery when comparing insourcing to traditional market options. The accompanying guidance sets out a methodology for a broader view, taking wider government objectives and economic and social goals into account.
That is a warning to anyone planning to satisfy the Test with a two column spreadsheet. Control, resilience and the capability of the state to deliver are named as reasons insourcing matters. Those factors do not appear in a unit cost comparison, and a Test that ignores them will not be a serious answer.
It also implies a resourcing question that commercial teams cannot solve alone. Assessing whether a service could be delivered in house requires operational colleagues who understand what delivery would take. Building that habit before 2027 is the practical preparation, more so than drafting templates.
The takeaways
- Public Interest Tests apply from 1 April 2027 to services projects above £1 million including VAT.
- Quarterly returns go to the Government Commercial Agency within 30 days of quarter end, first due 30 July 2027.
- Organisations spending £100 million or more a year must publish a five year Insourcing Strategy.
- A well built Insourcing Strategy can remove the need for individual Tests on requirements it already appraises.
- The Test is meant to look beyond cost to value, control, resilience and wider government objectives.
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