Outsourcing in the public sector dropped significantly in the first half of this year, with the private sector taking the larger UK market share, according to research from global sourcing firm TPI.
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Between 2005-2010 60% of all UK outsourcing contracts with a value of €20m or more came from the public sector, according to TPI. But for the first time this figure dropped to 49% between January and June 2011, with the remaining share coming from the private sector.
According to TPI, 86% of public sector outsourcing in Europe, the Middle East and Africa (EMEA) came from the UK between 2005 to 2010. However, that figure fell to 71% this year, as public sector outsourcing activity increased in other EMEA regions.
Duncan Aitchison, president of TPI EMEA, said: "The pace of UK public sector deals increased in first half of 2010, while contract sizes decreased. The public sector is also looking for multiple vendors rather than long-term change initiatives.
"I suspect we will see an increase in public sector spending going forward. One reason we're seeing lower value and higher numbers is due to the sector addressing near-term issues. The pace of public sector outsourcing contracts does take quite a period of time. As we look over the next couple of years we will see some significant additional outsourcing activity as both central and local government look to bring down spending levels," Duncan Aitchison said.
In 2011 the top 10 leading outsourcers in the UK public sector market, including business processing, were: BT, Capgemini, Capita, Babcock, Keane, Logica, Morrisons Facilities Services, Mitie Facilities, Siemens and TCS.