Taxpayers ‘funding the outsourcing sector’

10 Jun 19

A union has claimed taxpayers are propping up the outsourcing industry as local authorities spent £20bn on contracts in the last three years.

The GMB union said that local authorities should be focusing on services “not lining the pockets of private companies”.

Research conducted by Tussell – a data provider on UK government contracts – found that between 2016 and 2018 local authorities spent £20bn on outsourced contracts.

Of these Transport for London was the biggest outsourcer of services by value, with 253 contracts costing an estimated £2.3bn over the three years.

Harrow Council, the Metropolitan police, Northern Ireland Housing Executive and North Lanarkshire Council make up the rest of the top five outsourcers.

GMB found that Veolia was the top supplier of services with contracts worth £1.4bn, followed by IBM, Pennon Group, Amey and Amazon.

The most commonly outsourced service was facilities management on which £5.3bn was spent, followed by waste management, business and IT services.

Rehana Azam, GMB national secretary, said: “If we’ve learnt anything form the collapse of Carillion – it’s that outsourcing doesn’t work.

“At a time when local authority funding is already cut to the bone, this out of control outsourcing places even more risks and burdens on budgets and workers.

“Taxpayers’ cash shouldn’t be propping up an outsourcing industry descending into chaos as companies underbid each other for contracts in a race to the bottom, which will see a serious decline in public services.”

Read PF’s feature on the local government insourcing.  

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