Value of UK public sector outsourcing deals up by 168%

A study by Arvato, a Business Process Outsourcing (BPO) provider, has found that 39 new contracts worth a total of £2.1 billion were agreed in the first quarter of 2014, which represents a 65% increase on the first quarter of 2013. Headlines from the index include:

  • BPO represented 71% of deals and £1.3 billion of spend, with IT outsourcing accounting for 29% of deals and £798 million of spend;
  • Three-quarters of contracts were completely onshore deals; and
  • 59% of the services in question were being outsourced for the first time.

The largest contract awarded so far this year was to Serco, a £520 million deal to run the Northern Rail franchise in partnership with Dutch rail operator Abellio, with Capita picking up the second, third and fourth biggest deals by value.