Public outsourcing deals soar to £3 billion amid Carillion collapse

Government spending on outsourcing huge contracts hit £3 billion in the quarter which saw Carillion collapse, it emerged on Tuesday.

Figures show suppliers picked up 16,000 government contracts in the first quarter of the year, while Carillion crumbled under a mountain of debts costing thousands of jobs.

Privately owned building firm Wates, which has been working on the refurbishment of government buildings in Westminster, was the biggest winner, helped by an £800 million housing contract win in Havering.

Building firms got much of the work, with housebuilder Taylor Wimpey landing £202 million in contracts and Kier £163 million.

Capita won the largest number of contracts of any government supplier, landing 59, according to data from public tenders researcher Tussell.

City & County Healthcare was the top Health & Social Care supplier, winning £136 million of awards, while IBM was the leading IT supplier at £94 million. Gus Tugendhat, founder of Tussell, said: “Despite wider economic uncertainty and concerns about the UK’s outsourcing model following the collapse of Carillion, activity in public procurement is showing few signs of slowing down.

“In Q1 2018, 16,000 government contracts were awarded to more than 8000 firms, demonstrating the huge opportunity that public procurement presents to businesses.”

He added that many of the contracts were won by 5000 small-to-medium-sized businesses, not just the biggest companies.

Billions of pounds worth of public contracts are due to expire in the next year.