The government has made a commitment to 'oversee the biggest wave of insourcing in a generation', ending decades of outsourcing and moving towards more in-house delivery of our public services. The first step towards this is the government’s new Public Interest Test (PIT) and Insourcing Strategy guidance in Procurement Policy Note (PPN) 024 developed with input from trade unions and the TUC.
This toolkit introduces the PIT and Insourcing Strategy guidance to union reps and explains how they can use it to support bringing services in-house. It’s most useful for reps in:
There's no direct obligation for private-sector employers to implement the guidance, though contractors delivering outsourced public services may still be affected if public bodies decide to bring services – and the workers delivering them – back in-house.
The Public Interest Test (PIT) is a check or series of questions that helps public bodies work out whether a service would be better delivered in-house. It looks beyond price and considers factors such as whole-life value, service quality, social value, and resilience. It also considers whether the organisation has the capacity and capability to deliver the service itself.
If the Test suggests a service could work better in-house, the contracting authority should then consider that option fully.
An Insourcing Strategy lays out what a public contracting authority intends to do to identify opportunities for insourcing, and how they will build the capability and capacity needed to deliver public services directly, or ‘in house’. This is usually a medium-term plan, which covers a minimum of five years.
From 1 April 2027, new government guidance under the Procurement Act 2023 means many public bodies must properly consider bringing services back in-house before they award big contracts — instead of treating outsourcing as the default. That means looking at factors beyond short-term cost, such as long-term public value, and whether the organisation has the capacity to deliver the service itself.
Before 1 April 2027:
From 1 April 2027:
Central government employers will have to look properly at bringing services back in house for many large contracts, instead of treating outsourcing as the default.
Over time, more outsourced services are likely to be insourced if contractors under‑perform, or in‑house delivery offers better value and control.
Departments and public authorities will be encouraged to rebuild the skills, staffing, and systems needed to deliver more services in-house, rather than just managing contracts.
The guidance links insourcing to high‑quality jobs, better labour standards, and more apprenticeships, which can improve pay, security, and conditions for workers.
Employers are told to look beyond price and consider whole-life value, resilience, social value, and public sector capacity. That gives unions stronger grounds to argue for insourcing.
The guidance is mandatory for some public-sector bodies, good practice for others, and doesn’t apply directly to outsourced or private employers – but it can still affect their contracts. Check the groups below to see whether your employer is directly covered. If you're unsure about your employer's status, check the government's Departments, agencies and public bodies directory.
These employers must follow the guidance:
central government departments
executive agencies
non‑departmental public bodies (NDPBs).
All public-sector contracting authorities are encouraged to use the PIT and insourcing strategy as good practice. Examples of public-sector contracting authorities include:
The guidance doesn’t apply to some devolved bodies in Wales, Scotland, and Northern Ireland as they’re outside the Procurement Act rules.
See the government’s Contracting Authority definition for a detailed list.
These employers who are not covered directly, but potentially affected.
The guidance doesn’t apply directly to employers contracted by a public sector contracting authority to deliver outsourced public services. But if you’re an outsourced worker delivering public services it can still affect your working arrangements, as the public body may use a PIT to decide whether to bring the work back in-house.
Typical outsourced services include:
Here’s how you can make sure members and your union benefit from the Public Interest Test and strategy guidance.
These actions are for reps in public sector bodies such as central government, agencies, and NDPBs.
Map which services members work on and flag any contract worth over £1 million a year that may need a Public Interest Test.
Ask when your employer plans to run Public Interest Tests, and who’s leading the work.
If your employer spends over £100 million a year on contracts, push for an insourcing strategy lead and for them to engage with your union as the strategy is developed.
Gather members’ experiences of staffing, pay, terms and conditions, and their effects on service quality and value for public money – feed that evidence into the PIT.
Collect evidence on staffing, training, turnover, safety, service quality, and capacity to deliver the service in-house.
Use the guidance's steer on trade union engagement to press for early union involvement in any PIT, and ask for the provisional sourcing decision plus the evidence behind it.
Insist the union is closely involved in the harmonisation of pay and terms and conditions if services move in-house.
Use the guidance’s own language in negotiations – whole-life value, resilience, social value, and public sector capacity.
These actions are for reps whose employer is encouraged to use the PIT and insourcing strategy as good practice.
These actions are for reps in outsourced service providers that are not covered directly, but may be affected.
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