In June 2026, the UK Government issued Procurement Policy Note 024 (PPN 024), marking a significant development in how public sector organisations approach service delivery. The policy introduces both the Public Interest Test and what can be considered a renewed focus on insourcing strategies. Read the full note here.

This insight discusses PPN 024 in detail, considering the scope of application, what it aims to achieve and what actions organisations should complete – including how Capsticks can help your organisation complete them.

Scope of application

PPN 024 applies to bodies that are referred to as ‘in-scope organisations’. These are:

• Central government departments
• Executive agencies
• Non-departmental public bodies

Other public sector organisations (such as NHS Trusts, NHS Foundation Trusts and local authorities) are also encouraged to follow the approach as best practice.

PPN 024 states that the Public Interest Test must be carried out before starting any project or re-procurement for services over £1 million (including VAT) that may lead to a public contract under the Procurement Act 2023. Exceptions include:

• Certain direct awards
• Exempt contracts
• Defence and security contracts
• Services delivered outside the UK
• Regulated health procurements
• Specific research activities
• Services already assessed through an Insourcing Strategy
• Procurements establishing frameworks or dynamic markets
• Call-off contracts under an existing assessed framework or dynamic market

Organisations are advised to circulate PPN 024 and guidance internally, particularly to staff in procurement, commercial, contract management, security, finance, operational and sustainability roles.

Strengthening decision-making in service delivery models

Under the new framework, some public sector bodies are required to adopt a more structured and consistent approach when evaluating delivery models. Other public sector bodies, such as local authorities, are advised to follow the new framework as a model of best practice. Organisations must demonstrate that in-house delivery options have been fully and systematically considered before proceeding with procurement.

Broadening value-for-money assessments

PPN 024 and associate guidance argues that government value-for-money assessments have historically focused too narrowly on cost when comparing insourcing with external delivery. The updated guidance now encourages a broader perspective, requiring decision-makers to consider financial factors as well as wider economic, social and policy objectives. This shift aims to ensure that sourcing decisions better reflect long-term public value rather than short-term savings alone.

Application of the Public Interest Test

From 1 April 2027, in-scope organisations must apply the Public Interest Test to all new relevant projects and re-procurements over £1 million, unless an exemption applies.

Where PPN 024 applies, organisations must conduct this Public Interest Test, record and report results quarterly to the Government Commercial Agency and, where annual contract spend exceeds £100 million, develop and publish a five-year Insourcing Strategy. The strategy is designed to help identify opportunities early, allowing time to build internal capability and adopt a more proactive, market-shaping approach.

Decisions following the Test must comply with the Procurement Act 2023, with each case assessed individually to determine the best value for taxpayers.

Conclusion

In conclusion, PPN 024 represents a meaningful shift in how public sector organisations should approach service delivery decisions. For organisations, it introduces a more structured and transparent framework through the Public Interest Test, ensuring that insourcing is given proper and consistent consideration.

Importantly, the guidance provides a strategic view of the value for money that reflects social impact and long-term outcomes. The requirement to develop forward-looking insourcing strategies also supports earlier planning, helping organisations build internal capability where it delivers clear advantage.

These changes that PPN 024 introduces will enable organisations to make informed decisions, while also demonstrating accountability.

Capsticks’ view

The changes should be viewed positively by contracting authorities. They strengthen decision‑making and promote a more strategic, long‑term approach to service delivery. By broadening value assessments and encouraging insourcing planning, the framework aspires to support better outcomes and more effective use of public resources across organisations.

How Capsticks can help

Our Procurement specialists support organisations delivering strategic insourcing projects and we offer end-to-end support for organisations navigating the Public Interest Test and Insourcing Strategy – from planning and compliance checks to interpreting and applying the rules in complex scenarios.

If you are interested in how we may be able to support your organisation in light of this development, please contact one of our procurement specialists: Partner Lucy Woods, Partner Ruth Yates or Principal Associate Ciaran Wells. This article has been prepared with the support of Paralegal Holly Davies.