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A desperate need to save cash will drive the public sector to open up further to private firms, according to City bosses. As predictions of double-figure percentage cuts in budgets surface and the Audit Commission offering bleak predictions of future funds, the heads of outsourcing firms said they expected to benefit from the inevitable efficiency drive. It came as Conservative leader David Cameron told the LGA conference that ‘Google Government' – publishing contract costs online – would help drive down costs. He is also looking to bring in global IT giants in a bid to cut costs on projects such as modernising NHS data systems. John Stokoe, head of UK public sector practice at BT Global Services, said: ‘The pressure on public finances will accelerate this process.' Healthcare and back office work in central Whitehall departments were pinpointed as the focus for potential savings. Renewed interest in outsourcing contrasts with the rapid decisions to shelve ‘big ticket' projects such as ID cards. Mr Stokoe's comments were echoed by Tom Riall, head of UK government business at Serco. He said: ‘The boundaries will be pushed back further. The pressure on spending, and the need for either political party to find efficiencies while maintaining or improving standards, mean they will have to resort more to the market.' One sector estimate valued the potential public services that could be outsourced at £95bn. Paul Pindar, chief executive of Capita, said local government was well-positioned to cope as it had learned more than its Whitehall rivals on how to deliver with less. He said: ‘Local government has been struggling with a fiscally tight position for more than a decade and I must say the quality of the back office…looks better than central government.'

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BUSINESS

Public sector braced for outsourcing rise

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