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UK is world leader in outsourced public services

22 August 2008

The contribution of outsourced public services to the UK economy has grown 130% since 1995 and now represents the most developed public service industry in the world.
The industry has grown so significantly over the past twelve years that it is now second in size only to the US, and with a turnover of £79 billion contributes more to the UK economy than key industries such as communications and electricity, gas and water supply.

Secretary of State for Business John Hutton said, “It is clear that private and third sector organisations play a valuable part in delivering modern public services and our substantial investment over the past ten years has paid off. This is now a thriving sector that employs over one million people and makes a major contribution to the UK economy. It is helping maximise taxpayer investment and improve quality as we strive toward world class public service delivery.

"UK companies and the services they deliver are of increasing global interest in this growing market. Across health, education, welfare, transport and criminal justice the tried and tested UK model is of increasing global interest in this growth market.”

To further support this industry the Government should reinforce and demonstrate a long-term commitment to open up public service markets and maintain effective competition, as well as appointing a Director of Service Delivery for all government departments and local authorities, who should have senior level responsibility for commissioning service delivery. The Government should also work together with the industry to raise the profile of the public service industry domestically and promote its export potential through UKTI.

Work could be done to reduce bidding costs 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.

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