Laura Sharman 19 May 2014

Outsourcing in local government increases by nearly 60%

Outsourcing in local government increases by nearly 60% image

Local government outsourcing contracts increased by 58% year-on-year in the first quarter of 2014, according to new figures.

The UK Quarterly Outsourcing Index, published by arvato, reveals that the public sector agreed £1.5bn of outsourcing deals this quarter, an increase of 168% compared to 2013.

According to the Index, the most popular outsourcing contracts were for back office services (38%), with HR accounting for 93% of all agreements.

Debra Maxwell, managing director of arvato UK, said: ‘The outsourcing industry is in good health at the start of 2014. A rise in total spend coupled with a high proportion of first-time outsourcing partnerships proves there is a clear business case for outsourcing, and smart organisations continue to use it as a means to achieve their objectives.

‘This is particularly true for the public sector, where the strong performance suggests that outsourcing remains a key strategy to reduce costs while protecting front-line services.’

The Index also shows that more than half of all contracts (59%) were first-time outsourcing deals, with 75% being onshore agreements.

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