In June, the Cabinet Office published PPN 024, the guidance behind what it calls the Public Interest Test and Insourcing Strategy. From 1 April 2027, every central government department, executive agency and non-departmental public body has to run new and re-procured service contracts worth more than £1 million through a formal test before going back to the market. The test asks two gateway questions, then scores the option against value for money, social value, economic impact and the department’s own capability to deliver the work itself. Departments spending more than £100 million a year on contracts also have to publish a five-year insourcing strategy and report their test outcomes every quarter, starting with April to June 2027.

The ambition behind it is explicit. The government’s own announcement in June framed it as ending “outsourcing by default” and bringing cleaners and security staff back onto the public payroll, echoing the precedent set after Carillion’s collapse in 2018, when around a thousand staff moved into the newly formed Gov Facility Services Limited to keep prisons running.

Independent analysis published in July gives the first real sense of scale. Of the central government FM contracts tracked against the policy, 63 records worth £1.75 billion in annual value have end dates on or after the April 2027 threshold, with a further £410 million in contracts whose end dates aren’t yet published. Four suppliers hold most of that exposure. ISS has the largest single position, £674 million across 11 contracts, close to two-fifths of the tracked value. Mitie holds £449 million across 16 contracts, Sodexo £151 million across seven, and Serco £134 million across five. Multi-service bundles and integrated FM contracts, the hardest kind to unpick service by service, account for over half the total value between them.

Against that backdrop, trade title i-FM reported this week that strategic suppliers are continuing to win new government FM work, naming it as a trend running counter to where policy is pointing. The specifics behind that claim sit behind a paywall and haven’t been independently confirmed at the time of writing, but the shape of it tracks with what the contract data already shows: departments hold £1.75 billion of exposed FM spend, the test that is meant to bring more of it in-house doesn’t bind until April 2027, and in the meantime the incumbents are still the ones being awarded the work that comes up for renewal now.

The test itself also isn’t a blunt instrument. Framework agreements aren’t automatically caught, only the individual call-offs made against them above the £1 million threshold, and a service tested once at framework stage may not need testing again at call-off. For a government estate built on multi-service and multi-year frameworks, that leaves plenty of room for a contract to keep rolling over largely as it is while the department technically remains “in scope.” Whether departments apply the test at the point frameworks are set up, or wait until individual call-offs force the question, is likely to shape how much of that £1.75 billion actually moves.

There’s also a live example of what insourcing looks like when it’s tried. The Government Property Agency is working through its own version of the test for building-management services across 83 government buildings, among them 10 Downing Street, as those contracts expire from 2028. Gov Facility Services Limited, the body set up after Carillion, now runs FM across 49 prisons in southern England with around 1,300 staff, giving departments a working precedent to measure any new in-house attempt against, for better or worse.

One deal makes the concentration question sharper still. OCS’s proposed £3.1 billion acquisition of Mitie cleared its UK national security review and EU antitrust approval in October, with completion still expected in the first quarter of 2027, though the Competition and Markets Authority’s own merger inquiry remains at Phase 1 pre-notification, with no inquiry launch date or Phase 1 decision deadline yet set. If the deal completes as planned, the combined group would hold roughly 30 per cent of the tracked contracts’ value between them, a scale of exposure to a single insourcing decision that neither company currently carries alone.

None of this plays out as a single wave of contracts moving in-house. It plays out service line by service line and contract by contract, as departments decide, renewal by renewal, whether cleaning goes in-house while security stays out, whether a framework gets tested at the point it’s set up or only when call-offs are made against it, and whether capability actually exists in-house to deliver what a department decides it wants to bring back.

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