Five-Year Insourcing Strategy: How Central Government Bodies Can Build a Credible Plan for 2027

Purpose: A process-led guide to the five-year Insourcing Strategy required by PPN 024 for in-scope organisations with annual contract spend of £100 million including VAT or more.

A process-led guide to the five-year Insourcing Strategy required by PPN 024 for in-scope organisations with annual contract spend of £100 million including VAT or more. This matters because public procurement decisions are rarely isolated events. A choice made during planning can affect competition, affordability, service quality, supplier behaviour and the ability to manage the contract later. The strongest approach is therefore to use the source guidance as part of an end-to-end commercial process, with clear ownership and evidence rather than as a document that is completed after the key decisions have already been taken.

Quick summary

• The Insourcing Strategy should be completed by 1 April 2027 and published within 30 days of completion.
• The requirement applies to in-scope organisations with annual contract spend of £100 million including VAT or more.
• The strategy is intended to provide a medium-term view of services and identify where internal delivery may be a credible future option.
• The accompanying guidance says the strategy should cover a minimum of five years and be treated as a living document.
• A comprehensive bottom-up review should take place at least every five years, or sooner if significant organisational or situational change justifies it.

What the guidance means in practice

The source material gives several anchors for that process. The Insourcing Strategy should be completed by 1 April 2027 and published within 30 days of completion. The requirement applies to in-scope organisations with annual contract spend of £100 million including VAT or more. The strategy is intended to provide a medium-term view of services and identify where internal delivery may be a credible future option. These are not interchangeable statements: some describe statutory or policy requirements and others describe recommended commercial practice. Teams should identify which category each requirement falls into, apply it to the organisation and procurement in scope, and keep a record of the judgement. Where guidance from 2021 or 2023 predates the Procurement Act 2023, its commercial principles can remain useful, but current legislation, regulations and current statutory guidance take precedence on legal process.

The practical value becomes clearer when the remaining guidance is read alongside the project lifecycle. The accompanying guidance says the strategy should cover a minimum of five years and be treated as a living document. A comprehensive bottom-up review should take place at least every five years, or sooner if significant organisational or situational change justifies it. The policy is designed to create lead time to build internal capability and capacity before individual contracts reach a sourcing decision. In day-to-day terms, this means the buyer should be able to answer three questions at any approval point: what outcome are we trying to achieve, what evidence supports the proposed commercial approach, and what will need to be managed after the decision is made? If those answers are weak, more analysis is normally more useful than adding another layer of narrative to an approval paper.

A practical process to follow

A proportionate process can be built into existing governance. The steps below are deliberately practical. They are not a substitute for the detailed source guidance, legal advice or local standing orders, but they provide a useful structure for a procurement or commercial team.

1. Step 1. Map services and contracts, including expiry dates, spend, criticality and dependencies. Record any assumption that could change the conclusion and when it will be reviewed.
2. Step 2. Group services into categories that allow common capability and delivery issues to be seen. Keep the analysis proportionate to the value, risk, novelty and criticality of the requirement.
3. Step 3. Identify where internal capability already exists and where capability would need to be built. Capture the source evidence and name the person accountable for the next decision.
4. Step 4. Prioritise deeper analysis based on public value, resilience, market conditions and the feasibility of transition. Record any assumption that could change the conclusion and when it will be reviewed.
5. Step 5. Align the strategy with workforce, digital, estates, finance and transformation plans. Keep the analysis proportionate to the value, risk, novelty and criticality of the requirement.
6. Step 6. Set an annual management review so the strategy remains useful between formal bottom-up reviews. Capture the source evidence and name the person accountable for the next decision.

What good looks like

Good practice is visible in the decision trail, not only in the final document. A reviewer should be able to follow the line from the service need, through market and cost evidence, to the route, evaluation, contract terms and management arrangements. Where several functions contribute, the file should show who owns each decision and where challenge occurred. The same principle applies to handover: useful assumptions, models, KPI definitions, risks, supplier information and approval conditions should move into mobilisation and contract management instead of being left in the sourcing archive. This continuity is particularly important for long-running public services, where staff can change but the organisation remains accountable for the outcome.

Recommendations for procurement teams

The following recommendations are suitable for teams that want to embed the topic into normal ways of working rather than create a parallel compliance process:

• Start from services and outcomes, not simply a supplier list.
• Separate current capability from capability that could credibly be developed.
• Use contract and market performance evidence to identify where a different model deserves examination.
• Give long-lead capability actions named owners and realistic timescales.
• Publish a useful strategy while applying appropriate treatment to sensitive material.
• Link the strategy directly to the procurement pipeline and future Public Interest Tests.

Common pitfalls to avoid

The most common problems are usually process failures rather than a lack of templates. Watch particularly for the following:

• Producing a list of contracts without a service-level analysis.
• Assuming insourcing is automatically preferable.
• Ignoring transition, recruitment, systems and management capability.
• Treating the strategy as a publication exercise that is not used in later decisions.

Easy-to-read takeaway

For five-year insourcing strategy: how central government bodies can build a credible plan for 2027, the core discipline is to start early, connect the analysis to a real decision and preserve enough evidence for the next stage of the lifecycle. The source material should help teams make better decisions, not merely produce more paperwork. Before acting on a live procurement, confirm the current version of the Procurement Act 2023, regulations, Procurement Policy Notes and any organisation-specific approvals or delegations. This is especially important for thresholds, notice duties, exemptions and policy requirements that can change over time.

Source basis

Primary source used: PPN 024: The Public Interest Test and Insourcing Strategy, June 2026. Related articles in this collection also draw on the other supplied Cabinet Office, HM Treasury and Procurement Act materials where the topics overlap.

This article is general procurement support content. It should be read alongside current legislation, statutory guidance and your organisation’s own governance and legal advice.