UK: Austerity Drive Will Hand Billions to Private Sector

Rubbish disposal is one of the services under threat of outsourcing


Austerity Drive Will Hand Billions to Private Sector
by Robert Booth, Richard Wachman and Jeevan Vasagar
Published on Saturday, July 17, 2010 by the Guardian/UK

A government efficiency drive aimed at slashing spending in town halls and boosting productivity in the health service is likely to deliver billions of pounds of new business for private companies, the Guardian has learned.

Outsourcing firms are preparing for a bonanza of local authority contracts to provide everything from bin men to back office bureaucrats and have reported a doubling in the number of deals on offer this year. Private health companies are also expecting to earn billions of pounds from the planned overhaul of the NHS in which GPs would take over responsibility for spending £70bn.

Executives at Capita, the UK's largest outsourcing firm, said the number of opportunities for local authority contracts has already doubled this year and they see the healthcare market as "vast and potentially lucrative".

Richard Marchant, head of local government strategic partnerships at Capita, an FTSE-100 company which already works for councils in Harrow, Swindon, Southampton and Sheffield, said: "A major problem for the public sector is, we feel, a significant opportunity for us. Opportunities are at their highest level in two to three years. This year we have probably seen a 100% increase in opportunities and I suspect we will see another 50% increase in the following year."

Such an increase could deliver a £60m boost to Capita's revenues while councils are anticipating a 30% budget cut over the next four years. Other firms vying for town hall contracts include Serco and Mouchel.



unhappycamper comment: It appears the Brits are suffering an economic 'malaise' from try #3 in Afghanistan.