Shareholder dividends from outsourced public services have risen by 67% in six years, new research from the TUC has revealed.

The analysis found that dividends and profits for the seven largest public limited companies that are running outsourced public services reached £642m in 2016, an increase of 67% since 2010. It also found divividends had increased despite pre-tax profits falling by 31% across the same period.

The TUC said public services should be protected in the wake of Carillion's collapse three months ago. It wants a new public interest test and corporate governance reforms for outsourced public services.

TUC general secretary, Frances O’Grady, said: 'We need to get back to running public services for the common good. Frontline staff work hard and aim high because they care about the community they serve. That should be the motivation for public service managers and boardrooms too.

'The Government needs to rethink outsourcing. Most services would be better off back in public hands. And the Government must reform outsourcing and corporate governance rules so that all services are run for the long-term benefit of the communities that depend on them.'