PPN 024 (PA 2023)

PPN 024 The Public Interest Test and Insourcing Strategy

In: Define > Business need

Overview

This 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.

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.

This PPN provides the framework for conducting a Public Interest Test and developing an Insourcing Strategy, enabling decision-makers to look beyond short-term pricing, to holistically assess long-term value for money, service quality, and broader economic and social goals when making sourcing decisions.

The test aligns with various commercial and business case stages and is intended to support in-scope organisations in identifying early opportunities for insourcing, providing sufficient time to plan for the development of any necessary internal capability. The test is not a substitute for the Delivery Model Assessment (DMA) or any other equivalent investment appraisal requiring an in-depth analysis of sourcing options.

Objective at this commercial stage

To conduct an early-stage assessment for planned services with an estimated value of more than £1 million (including VAT), evaluating service characteristics and organisational capability to identify potential for in-house delivery, and establishing a provisional sourcing decision as a baseline for subsequent detailed delivery model appraisals.

Key considerations at this commercial stage

In-scope organisations should:

  • conduct the Public Interest Test early in the project lifecycle, applying the principles proportionately, commensurate to the complexity and value of the service
  • assess service characteristics to determine if in-house delivery could offer better value for money, social value or economic growth.
  • evaluate the organisation's current capability and capacity, including budget availability, to recruit staff, mobilise infrastructure, and manage the transition to an in-house model
  • ensure the resulting Provisional Sourcing Decision is rigorously tested through subsequent analysis to validate feasibility and confirm the final recommended delivery model
  • record the Provisional Sourcing Decision and report the final delivery model outcome via a quarterly return.

Additional support and guidance