IT outsourcing in public sector grows by 55%

IT outsourcing in public sector grows by 55%

IT outsourcing in UK public sector grew by 55 per cent during the last six months of 2015, new research has found.

A study by Nelson Hall for Arvato found that the acceleration during the second half of the year was particularly dramatic when compared to the first six months of the year.

However, spending on IT outsourcing in the private sector was found to have gone in the opposite direction, slipping by 42 per cent in the second half of the year compared to the previous six months.

Between July and December, public sector organisations sealed £2.31 billion of deals, comfortably overtaking the £688 million spent in the private sector during the same period.

Central government was found to be the biggest contributor, accounting for £1.77 billion of the deals made during that time.

The research found government had placed a particularly strong emphasis on HR, document management and multi-scope IT infrastructure agreements.  

Similarly, local government has also saw an increase in spending during 2015 of 23 per cent, investing a total £756 million.

The services most requested included back-office outsourcing, with many of the subsequent contracts focusing on revenues and benefits, HR and multi-process customer management services.

Combined, the public and private sectors saw a total of £5.67 billion spent on deals during 2015, with £3.8 billion spent in the public sector alone – a 26 per cent increase on the number recorded for the previous year.

Debra Maxwell, chief executive, CRM and public sector at Arvato UK, said: “The surge in activity across the public sector comes as no surprise as the market rallied following the general election."

“It’s clear from the research findings that an increasing number of departments and authorities are turning to the private sector to help them with the service transformation needed to address the new targets introduced in November’s Spending Review.”