The era of 'outsourcing by default' is coming under scrutiny as the government announces a significant policy shift aimed at bringing key services back in-house. A new guidance framework published yesterday signals an end to the trend of automatically outsourcing public services, instead prioritising long-term value for taxpayers and rebuilding state capacity.
At its core, this initiative introduces a Public Interest Test that will be applied before renewing government contracts worth over £1 million. This test forces departments and officials to weigh up the pros and cons of in-house delivery against external provision, rather than simply opting for the cheapest short-term solution.
The reforms also require central government departments with an annual contract spend exceeding £100 million to draw up five-year roadmaps outlining their plans to rebuild in-house capabilities. This is a direct response to years of outsourcing that have led to concerns about the state's ability to deliver essential services directly.
A notable example of this new approach will be the Cabinet Office's decision to bring building management services back in-house, including cleaning and security staff for 83 government buildings due to expire in 2028. This move, subject to a successful Public Interest Test, is seen as a flagship initiative underlining the government's commitment to insourcing.
Chief Secretary Darren Jones highlighted the ambition to build stronger in-house capacity, stating that 'the British people deserve value for money and high-quality services'. Chancellor Rachel Reeves echoed this sentiment, promising to change the UK's economic model so that public services are run in the public interest. Cabinet Office Minister Chris Ward described this initiative as the beginning of a 'wave of insourcing'.
This policy follows on from previous efforts by Mr Jones to shift away from outsourced government training contracts. The National School of Government and Public Services, established under his tenure, has accelerated the transition towards in-house delivery. A notable example is the cancellation of the Learning Framework 2.0 procurement in favour of an in-house model, which it claims will reduce reliance on external spending and offer better value to taxpayers.