The local government sector accounted for over £20m of outsourcing spend between July and September this year, contributing to a public sector outsourcing spike.
The Arvato UK Outsourcing Index found public sector outsourcing contracts worth £723m were signed in the third quarter of this year - compared with £722m in the first two quarters combined.
The figures, compiled by the business outsourcing partner along with industry analyst NelsonHall, reveal councils account for £22m of the overall figure.
Large back-office business process outsourcing (BPO) deals accounted for the majority of spend. Revenues and benefits, HR and finance and accounting were the most popular functions outsourced across both local and central government.
Debra Maxwell, CEO, CRM Solutions UK & Ireland, Arvato, said: ‘The local government outsourcing market is undergoing a significant change.
‘Rather than the larger scale, long-term partnerships for multiple services, we’re seeing councils focus on procuring smaller contracts for consultancy services and new technology, such as Robotic Process Automation (RPA), to deliver the digital transformation they need with greater flexibility and responsiveness.’
The increase in public sector activity means government buyers accounted for 70% of all outsourcing spend in the UK between July and September.
