More than £4bn of outsourcing tenders is currently under negotiation, according to a study of contracts the Official Journal of the European Union.

According to today’s Financial Times, this has led to many City investment analysts – who have conducted research into outsourcing companies’ bid pipelines - predicting an outsourcing boom.

Martyn Hart, Chairman of the National Outsourcing Association said:

“Pressure on the public sector to make cost reductions has made for a healthy pipeline for many outsourcing suppliers, particularly now that tender costs have been reduced through ‘de-formalisation’ of the bid process. Having learned to engage suppliers earlier in the process, expect more business process outsourcing, as the public sector learns how to get itself a better deal. Commoditised IT can save around 10% annually, but only accounts for 5-6% of government spend - BPO can offer savings on a much grander scale. Expect those companies that offer both ITO and BPO services to be most coveted by City investors. And, to ensure Outsourcing Works, the government must invest the time to up-skill its people. Only through proficiency, experience and knowledge-sharing can the public sector maximise the cost and service benefits of this outsourcing boom.”