The value of government contracts handed to the private sector has increased dramatically over the last five years and is likely to continue growing at a rapid pace. This recent growth in outsourcing has raised concerns, with a number of private providers widely criticised for poor transparency, poor management of government money, and in particular excessively high executive pay and pay inequality between employees.
Our briefing note, Subsiding Inequality, provides the most up to date facts on the size and cost of the public service outsourcing sector, looks in detail at the top suppliers and the pay in these organisations and presents recent research on public opinion on outsourcing. It finds:
- In 2013 the Government spent approximately £93.5bn on third party services. This is half the £187bn government spends on goods and services each year.
- In 2013 the Director of Telereal Trillium was paid £1.4 million or 116 times the amount someone on the national minimum wage gets from working full time for a year. In contrast, the pay ceiling for civil servants is £334,999.
- None of the top government contractors are accredited Living Wage employers
- 88% of the UK population thinks that private companies running public services should be as transparent about their performance and financial data as the public sector.