Procurement Policy Notes: PPN 024 and PPN 025

The Government has issued two new Procurement Policy Notes which, read together, signal a more deliberate and strategic use of public procurement. PPN 025 focuses on protecting national security through procurement decisions, while PPN 024 introduces a formal Public Interest Test and a clearer expectation that authorities consider insourcing alongside outsourcing.

PPN 025: Protecting the UK’s national security through procurement

PPN 025 is driven by the Government’s National Security Strategy 2025, which highlights a major cultural shift in how public procurement should be used to protect national security.  The PPN makes clear that national security now extends beyond defence and includes supporting critical sectors and securing supply chains so they can be relied upon in times of crisis. The policy identifies four sectors as particularly important: shipbuilding, steel, artificial intelligence and energy infrastructure.  

The PPN sets out three core actions for contracting authorities:

1. Identify the procurements in their pipeline that are relevant to the sectors listed above and assess their national security implications, including supply chain vulnerabilities and dependency risks.
2.  Engage early with the relevant Sector Lead, who will provide coordination, market insight and support in developing the commercial approach.  
3. Consider whether to deploy the national security exemption in the Procurement Act 2023, where appropriate and justified.  
   The accompanying guidance makes clear that use of the exemption must be justified on a case-by-case basis and supported by an evidence-based rationale, with decisions recorded and aligned with the UK’s trade obligations.  It also emphasises that procurement should be used as a tool for market shaping, including managing supply risk and strengthening long-term resilience.

In practical terms, PPN 025 will require contracting authorities to incorporate national security considerations into routine procurement planning and to engage more closely with central government. For suppliers, particularly in the identified sectors, there is likely to be increased focus on supply chain security, resilience and alignment with wider government priorities.

PPN 024: The Public Interest Test and insourcing strategy

PPN 024 complements this shift by focusing on how authorities decide whether to outsource services at all. It introduces a structured Public Interest Test, designed to ensure that decisions about outsourcing or insourcing are made on a broader and more consistent basis.

The core premise is that authorities should not assume that outsourcing is the default model. Instead, they are expected to assess delivery options in the round, taking into account factors such as value for money over the long term, service quality, resilience, and the strategic importance of the service. The emphasis is on determining what best serves the public interest, rather than what is cheapest or most convenient in the short term.

Alongside this, the PPN requires authorities to take a more proactive approach to insourcing strategy. This includes considering whether services could be delivered in-house and, where appropriate, building the capability to do so. The intention is to support greater control over critical or sensitive services and to ensure continuity and resilience of delivery.

A key practical requirement is that the Public Interest Test must be properly evidenced and documented before a procurement is launched. This may lead to fewer opportunities going to market where authorities conclude that in-house delivery better meets their objectives.

For suppliers, the impact is likely to be most visible at renewal stage, where authorities may revisit delivery models rather than automatically re-procuring existing contracts. Suppliers will therefore need to engage earlier and demonstrate how their offering supports not just cost efficiency, but also wider outcomes such as resilience and service quality.

A more strategic procurement landscape

Both PPN 024 and PPN 025 point towards a more interventionist and strategic approach to public procurement. Authorities are expected to think beyond immediate delivery needs and consider how their decisions affect national resilience, market capability and long-term public value.

Procurement processes are likely to become more complex and more closely aligned with government policy objectives. Early engagement, robust analysis and clear documentation will be essential to navigate this evolving landscape. At the same time, suppliers will need to adapt by demonstrating not just competitiveness on price, but also their contribution to broader strategic goals.

By Miranda Lee (trainee solicitor) and Jenny Beresford-Jones (senior legal advisor).

Our content explained