Outsourcing contracts signed by local councils fell by £59m in the first six months of this year, compared to the same time period in 2017, new figures reveal.

The Arvato UK Outsourcing Index found contracts worth £77m were signed by local government buyers between January and June of 2018, down from £136m in the first half of 2017.

However, the total value of public sector spending on outsourcing contracts was up 39% year-on-year. The Index shows that IT outsourcing accounted for more than three quarters (795) of the public sector spend.

Debra Maxwell, CEO, CRM solutions UK & Ireland, Arvato, said: 'The public sector market is showing signs of recovery as government organisations take the brakes off the tendering process.

'More than two thirds (68%) of contracts signed across the sector this year represent new relationships, showing outsourcing remains a key strategy for delivering new technologies, such as cyber security and automation, to drive efficiency and service improvements.'

Find out why outsourcing is becoming a far more perilous market for local government to invest in.