Chief Constable Matt Baggott does have legal power to spend his budget on hiring temporary civilian staff, the High Court heard yesterday.
A judge was also told how a blueprint for reforming policing in Northern Ireland envisaged former officers potentially providing services on a management buyout basis.
The PSNI is facing a challenge to its plan to bring in outside staff on a contract worth up to £180m.
Public sector union Nipsa claims the deal with Resource NI for support workers is unlawful.
But senior counsel for the police yesterday said the case has shifted to an acceptance of aspects of the contract. Tony McGleenan QC also set out how sweeping policing changes from the Patten Commission had dealt heavily with civilianisation of the force.
Although not every recommendation was implemented in the Police (NI) Act 2000, the court heard how it intended that services such as transport, IT and communications should be contracted out. Mr McGleenan said the plan included ex-RUC men and women who left as part of the overhaul being able to contract for certain infrastructure work.
Nipsa's case is being heard alongside a challenge taken by Vivienne McCord, whose son Raymond McCord jnr (22) was beaten to death in 1997. She fears bringing ex-police officers back in to help with historical inquiries may thwart efforts to establish the full circumstances of his the killing.
His murder was at the centre of a damning report by former Police Ombudsman Nuala O'Loan which established evidence that rogue Special Branch officers colluded with a north Belfast UVF gang responsible for up to 16 murders.
Both Nipsa and Mrs McCord want the contract with Resource declared unlawful.
But Mr McGleenan argued Patten intended the Chief Constable to be the accounting officer with autonomy over his budget. He told the court: "Provided he does spend it for police purposes he is doing nothing unlawful. What flows from that, and the drawing board of Patten, is that the Chief Constable is empowered to spend his resources for police purposes, including to contract out services."