UK Quarterly Outsourcing Index

Welcome to Arvato’s UK Quarterly Outsourcing Index – a market research initiative designed to analyse and document outsourcing activity in the UK.

We believe that our research will help shine a light on the contribution outsourcing makes to the UK economy – from the millions of jobs it sustains to the technical innovations it helps launch and the cost savings it delivers for a large number of organisations, public and private.

The Arvato UK Quarterly Outsourcing Index is compiled in partnership with leading BPO and IT outsourcing research and analysis firm Nelson Hall. The research is based on an analysis of outsourcing contracts completed each quarter.

Q2 2017

Financial services sector drives UK outsourcing to record period

Other key findings from Q2 2017 include:

  • Outsourcing deals worth £5.2 billion were agreed in the UK between January and June 2017, up 23 per cent year-on-year
  • UK private sector accounted for the majority of outsourcing spend in H1, signing contracts worth £4.5 billion
  • Financial services was the most active sector, agreeing deals worth £2.9 billion in the first six months of the year, up from £428 million in H1 2016
  • The number of deals signed by energy and utilities firms grew by 20 per cent year-on-year between January and June
Q1 2017

Strongest quarter in five years for private sector outsourcing market

Other key findings from Q1 2017 include:

  • The value of deals agreed by UK companies reached £2.42 billion in Q1, the largest private sector spend since Q4 2011
  • Businesses spent £1.65 billion on introducing new technology between January and March
  • All contracts signed in Q1 involve UK delivery
  • Outsourcing deals worth a total of £2.73 billion were agreed in the UK over the period
  • Telecoms businesses accounted for 18 per cent of all contracts signed in Q1
2016 full year review

Customer services dominated UK outsourcing market in 2016, research finds

Other key findings from the 2016 full year review include:

  • Customer service deals represented 17 per cent of UK outsourcing market value in 2016
  • Only four per cent of customer service contracts signed last year to be delivered offshore
  • Outsourcing deals worth a total of £6.2 billion were agreed in the UK over the period
  • Spending across local government increased eight per cent year-on-year in 2016
Q3 2016

Private sector dominates outsourcing market in 2016 despite overall slowdown

Other key findings from Q3 2016 include:

  • Private sector deals worth £3.18 billion were signed in the year to September 2016, double the value of contracts agreed year-on-year
  • Customer services accounted for 30 per cent of overall spend by businesses
  • Value of UK outsourcing contracts signed between January and September fell 11 per cent year-on-year
  • Deals worth a total of £969 million were signed in the UK in the third quarter
Q2 2016

UK businesses increasingly integrating digital customer services, research finds

Other key findings from Q2 2016 include:

  • 83% of UK customer service outsourcing contracts were multi-channel in H1 2016, compared to 50% in 2015
  • Spend on customer services outsourcing reached £706 million, up from £62 million in the same period last year 
  • Value of UK outsourcing grows 19% year-on-year to £3.91 billion in January to June 2016
  • Spending in local government rose 84 per cent year-on-year to £684.9m
Q1 2016

More retailers outsource to boost multi-channel capabilities, research finds

Other key findings from Q1 2016 include:

  • Total value of outsourcing deals in retail up 116 per cent year-on-year in Q1
  • Two thirds of contracts signed between January and March involve delivering multi-channel services
  • Average value of contracts procured by retailers increased 73 per cent year-on-year
  • UK outsourcing agreements worth £2.08 billion were procured in Q1
2015 full year review

Arvato Index reveals year of two halves for UK outsourcing

Other key findings from the 2015 full year review index include:

  • Public sector spend in H2 rose 55 per cent compared with first half of the year
  • 26 per cent year-on-year rise in government spending on outsourcing
  • £5.67 billion of UK outsourcing agreements were signed in 2015
  • Only 6 per cent of services delivered entirely offshore compared to 9 per cent in 2014
  • Retail outsourcing increased by 47 per cent year-on-year
  • HR continues to be the most outsourced back-office service
Q3 2015

Post-election surge in UK outsourcing

Other key findings from Q3 2015 include:

  • Outsourcing spend more than trebled in July to September compared to the second quarter of 2015
  • Deals worth £2.21 billion agreed in Q3
  • Total spend on outsourcing contracts rises 69 per cent year-on-year
  • Largest public sector spend since Q1 2012
  • Local government contract values grow 66 per cent year-on-year
  • Telecoms industry accounts for largest private sector spend
Q2 2015

Major growth in public sector shared services since 2010 Spending Review

Other key findings from Q2 2015 include:

  • Shared services accounted for £1.2 billion in central government outsourcing since the 2010 Treasury Spending Review, compared to just £58 million during the previous five years
  • Outsourcing of shared services also increased in local government during the same period with deal value doubling to £97.9 million
  • Value of outsourced revenues and benefits contracts rises by 27%, with £239 million spent in total
Q1 2015

Local government outsourcing hits five quarter high

Other key findings from Q1 2015 include:

  • £350 million of local government deals signed in Q1, representing almost a quarter of all UK outsourcing spend
  • The public sector accounted for 65 per cent of the total value of contracts in Q1
  • Average length of local government contracts rises 70 per cent year-on-year
  • 58 per cent of contracts were first-time outsourcing deals
  • 97 per cent of agreements involve onshore delivery
2014 full year review

Just 8% of outsourcing deals go offshore in 2014

Other key findings from our 2014 full-year review include:

  • £6.65 billion of UK outsourcing deals agreed in 2014
  • 55.5% of contracts are first-time outsourcing deals, rising from 33% in 2013
  • Average local government contract values up 15% year-on-year
  • Financial services industry responsible for £1.1 billion of deals
  • 187% growth in value of energy and utilities contracts to £1.072 billion
  • 15% year-on-year growth in total value of IT Outsourcing to £3.44 billion
Q3 2014

UK outsourcing index finds growth in HR contracts

Other key findings from Q3 2014 include:

  • HR accounts for a quarter of all outsourcing deals signed in 2014 so far, totalling £93 million
  • Overall 25 BPO and ITO deals, worth £421 million, were signed July - September 2014
  • Third consecutive quarter of growth in percentage of first time outsourcing deals - 64% in Q3
  • 24% of contracts were extensions or expansions of existing deals
  • 76% of all contracts to be delivered onshore in UK – up from 60% in the same period last year
  • Public Sector, including healthcare, central and local government markets represents the majority of spend, with £108 million coming from local government
Q2 2014

UK manufacturing sector spends 132% more on business and IT outsourcing in 2014

Other key findings from Q2 2014 include:

  • 66% of all outsourcing contracts in the manufacturing sector were first time agreements
  • In local government, the outsourcing market continues to mature as 75% of all agreements were renewals, extensions or supplier changes
  • Nearly 95% of the volume of deals in Q2 came from the private sector with telecoms & media, financial services and energy & utilities totalling 70% of Q2 spend (£513m)
  • Business Process Outsourcing (BPO) deals were most in demand (52%) with HR outsourcing remaining the most popular BPO service line, clocking up eight deals in Q2
  • Overall, the value of outsourcing deals in Q2 totalled £734m from 34 contracts
Q1 2014

Value of UK public sector outsourcing deals up by 168% in Q1 2014

Other key findings from Q1 2014 include:

  • £1.5bn of public sector deals agreed
  • 65% year-on-year rise in total outsourcing spend
  • 75% of contracts are onshore agreements
  • More than half of contracts are first-time outsourcing deals