Outsourced public services have grown 130 per cent since 1995 and a review of the public services industry has called for the appointment of a Director of Service Delivery for all government departments and local authorities. The industry has grown so significantly that it is now second in size only to the US, and with a turnover of 79 billion pounds contributes more to the UK economy than key industries such as communications and electricity, gas and water supply.

The review examined the increasing contribution made to the UK economy by firms and other organisations who deliver services in the NHS, the prison service and right across the public sector. It also examined the market’s scale, employment base and characteristics of its leading players.

The review recommends that the Government should reinforce and demonstrate a long-term commitment to open up public service markets and maintain effective competition. It should provide a level playing field for public, private and third sector bidders by considering such measures as tax treatment and pension obligations and costs. The review also wants the Government and industry to work together to raise the profile of the public service industry domestically and promote its export potential.

Concern was expressed about bidding costs and there is a call to drive costs down by agreeing clear and consistent objectives, simplifying bid documentation, reducing uncertainty around timing and engaging in earlier and more open communication about desired outcomes and risk allocation.