PPN 024 (PA 2023)

PPN 024 The Public Interest Test and Insourcing Strategy

In: Plan > Strategy and plan

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

In-scope organisations should develop a five-year Insourcing Strategy aligned with wider business priorities. This should provide a detailed analysis of essential service categories. Crucially, the strategy should identify areas with high insourcing potential and outline the best approach for building the in-house capability required to deliver these services. Insourcing Strategies should be published on official websites.

Key considerations at this commercial stage

In-scope organisations should:

  • profile operational needs to determine where direct in-house control, resilience, and flexibility are most critical
  • evaluate external market health and historic contract performance to identify areas of market failure, or poor value for money as a basis to develop a target operating model
  • assess practical implementation barriers, such as upfront funding requirements and the feasibility of exiting existing commercial arrangements
  • secure senior leadership and Ministerial approval, then publish the strategy on their official website.

Additional support and guidance