Value of outsourcing deals in local government surges in first half of 2016

The value of outsourcing contracts across local government rose by 84% in the first half of 2016, with deals signed worth £684.9m, against the same period a year earlier.

That finding comes from the business process outsourcing firm Arvato UK in its latest survey of the outsourcing market.

Its Arvato UK Outsourcing Index found the number of deals signed by local authorities in this period was 50% up on the 2015 position, with a 22% increase in the average value of each deal. These were focused on outsourcing for IT services.

Local government outsourced spending rose despite a 2% fall in the value of such contracts across the public sector, the index showed.

Debra Maxwell, Arvato’s chief executive of CRM Solutions, UK & Ireland, said: “The sustained growth in local government outsourcing that we’ve witnessed over the last 18 months has continued in the first half of 2016, reflecting the ongoing pressure on local authorities to adapt, innovate and transform.”

Mark Smulian