The total value of outsourcing contracts agreed by councils in 2018 fell by more than £80m in 2018, according to the Arvato UK Outsourcing Index.
The Index revealed that local government signed outsourcing contracts worth £176m in 2018, compared to £258m in the previous year.
Overall though, the public sector outsourcing market soared to a three-year high in 2018 with government organisations signing contracts worth £2.9bn. Spending on IT outsourcing agreements reached £2bn in 2018 – an 84% year-on-year rise, according to the findings.
Debra Maxwell, CEO of Arvato UK and Ireland, said: ‘The government’s focus on technology investment marks an acceleration towards delivering digital by default, and demonstrates that public sector bodies recognise outsourcing as a key strategy to deliver much-needed efficiencies and to boost productivity.
‘Our findings show that procurement teams are increasingly moving away from long-term, high-value contracts, choosing instead to access services through new government frameworks, such as G-cloud, to deliver the transformation they need at speed.’