Nearly one in every five pounds of public sector IT spending currently goes to Capita, The Register has revealed.

In 2012 Capita received £671 million through providing the public sector with IT services. Despite overall government IT outsourcing spending remaining the same since that year, Capita’s total earnings from IT in the public sector rose to £905 million in 2014.

The Register also reported that Capita has been paid £1.3 billion for providing outsourced services to local government over the last three years – almost 15 times more than rival Capgemini.

Capgemini retains the largest overall share of the public sector market due to its Aspire mega-contract with HMRC. However, the deal is due to expire in 2017, while this year Capita signed a contract with the NHS to provide back office services which could be worth up to £1 billion over the next four years.

It is thought that such mega-deals are to become rarer in the future, with many organisations in the private and public sector alike favouring shorter-term contracts involving a larger number service providers. This approach encourages innovation through collaboration and allows for adaption if the technologies involved in the outsourcing deal advance rapidly after the contract is signed.

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