Outsourcing firms earned £6 bn from UK public services, fueling wage pressure
Outsourcing companies generated an estimated £6 bn profit from UK public services, accounting for about 11% of total public spending.
According to a new Common Wealth study, outsourcing firms earned roughly £6 bn in profit from UK public services, representing close to 11% of all public expenditure. The government spent £129 bn on services delivered by private contractors, despite pledges to increase in-house provision. Companies such as Serco, Mitie and Sodexo dominate the market, with Serco deriving 90% of its global revenue from public contracts.
The sector employs about 1.3 million workers—over seven times the number of police officers—most of whom occupy low-paid positions, while senior executives command salaries in the high-hundreds of thousands. The report’s author, Sophie Flinders, recommends large-scale insourcing and collaboration with unions to restore decent work for more than a million employees.
Why it matters
The profit and employment patterns of outsourcers affect public budgets and workers' wages across the UK.
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