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Local government outsourcing contracts rose 15% in 2014: research

The average contract value of outsourcing deals in the local government market rose by 15% in 2014 to £30.3m, research has suggested.

The report – by business process outsourcing provider arvato, in partnership with analysts at NelsonHall – also suggested that 60% of all local government contracts signed were extensions, renewals or the replacement of incumbent suppliers.

This was up from 37% in 2013, “demonstrating that outsourcing continues to play a fundamental role in local authorities’ efforts to operate more efficiently”, the authors claimed.

The report suggested that £6.65 bn of UK outsourcing deals were agreed in 2014 across all sectors. Just 8% involve work being delivered entirely offshore.

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Debra Maxwell, Managing Director of arvato UK, said: “Outsourcing has mistakenly become synonymous with offshoring, yet our research demonstrates that UK delivery is continuing to play a fundamental role in the industry as customer requirements become more sophisticated.”

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