The UK public sector is set to outsource a further £20bn worth of services over the next three years, a growth of 50 per cent, new research reveals.
The outsourcing market is to grow from just under £45bn this year to more than £67bn by 2006-7, according to research group Kable.
One of the main factors influencing the expected outsourcing boom is the Government’s efficiency agenda to achieve £21.5bn in savings by 2008 and cut more than 80,000 civil service jobs.
Whitehall outsourcing alone could reach £7bn a year “directly as a result” of the Gershon Efficiency Review, the report says.
Karen Swinden, Kable’s head of forecasting, said: “The public sector has been using the private sector to deliver services since the early 1980s and yet, 20 years on, it still outsources only a small part of what it does.
“Given that the public sector has been set a target of saving £21.5bn a year by 2008, through shared services, business process re-engineering and cutting 100,000 civil service jobs, outsourcing could receive a further boost.”