London councils have become heavily reliant on private firms to carry out basic functions, with a staggering £555m spent on consultancy and outsourcing services last year. This has raised concerns about the erosion of public capacity and the long-term sustainability of local government in the city.
The report by the Autonomy Institute and CADA Network found that London councils have been paying these companies more than half a billion pounds annually since 2022, with the amount set to exceed £500m for consecutive years. The scale of this reliance has grown significantly since 2010, when council budgets were cut by a third.
Private firms provide a range of services, including leasing software and IT systems, bringing in temporary workers to cover understaffed or underfunded services, and offering advice on budgeting and planning decisions. However, critics argue that this trend is not just about short-term specialist advice but rather represents the systemic outsourcing of core council functions.
"This research shows how local government capacity has been hollowed out by years of outsourcing and austerity," warned Will Stronge, chief executive of the Autonomy Institute. "London's councils are now structurally dependent on private consultancies for core functions, and that should worry all of us."
The report highlights the spiraling sums paid to these firms, with some companies receiving contracts worth over £1 billion since 2010. Matrix SCM, a managed service firm, received contracts worth more than £2.1 billion during this period, while Capita and Serco were paid nearly £1.1 billion and £500m respectively.
Some councils have been accused of outsourcing frontline services to private firms at the expense of their residents. For example, Barnet council's infamous decision to outsource most of its frontline services to Capita in the early 2010s led to criticisms about the quality of care for vulnerable individuals. The council was forced to return some services to in-house but extended its contract with Capita due to "complexities and scale involved".
Lambeth council disputed the findings of the report, claiming that some costs were misattributed. However, critics argue that this trend represents a fundamental shift in the way local government operates, with private firms playing an increasingly prominent role in providing public services.
As one councillor at Barnet council quipped, "Caxit means Caxit" – a reference to the council's pledge to end outsourcing to Capita by 2026. But critics warn that this is just a temporary measure and that the long-term sustainability of local government remains uncertain.
The report by the Autonomy Institute and CADA Network found that London councils have been paying these companies more than half a billion pounds annually since 2022, with the amount set to exceed £500m for consecutive years. The scale of this reliance has grown significantly since 2010, when council budgets were cut by a third.
Private firms provide a range of services, including leasing software and IT systems, bringing in temporary workers to cover understaffed or underfunded services, and offering advice on budgeting and planning decisions. However, critics argue that this trend is not just about short-term specialist advice but rather represents the systemic outsourcing of core council functions.
"This research shows how local government capacity has been hollowed out by years of outsourcing and austerity," warned Will Stronge, chief executive of the Autonomy Institute. "London's councils are now structurally dependent on private consultancies for core functions, and that should worry all of us."
The report highlights the spiraling sums paid to these firms, with some companies receiving contracts worth over £1 billion since 2010. Matrix SCM, a managed service firm, received contracts worth more than £2.1 billion during this period, while Capita and Serco were paid nearly £1.1 billion and £500m respectively.
Some councils have been accused of outsourcing frontline services to private firms at the expense of their residents. For example, Barnet council's infamous decision to outsource most of its frontline services to Capita in the early 2010s led to criticisms about the quality of care for vulnerable individuals. The council was forced to return some services to in-house but extended its contract with Capita due to "complexities and scale involved".
Lambeth council disputed the findings of the report, claiming that some costs were misattributed. However, critics argue that this trend represents a fundamental shift in the way local government operates, with private firms playing an increasingly prominent role in providing public services.
As one councillor at Barnet council quipped, "Caxit means Caxit" – a reference to the council's pledge to end outsourcing to Capita by 2026. But critics warn that this is just a temporary measure and that the long-term sustainability of local government remains uncertain.
london councils are basically handing over their public capacity to private firms and it's like they're not even trying anymore 
what's going on here? these companies are just making bank off our tax money 
and the councils are just along for the ride 
meanwhile, frontline services are getting cut and residents are suffering 
we need to hold these councils accountable and demand change ASAP 
. it's not jus about gettin expert advice, it's like they're losin control of their own functions 
. will stronge @ autonomy institute is spot on, london councils r structurally dependent on private consultancies, it's like, how long can dis go on? 
i mean i get that they might need some help with budgeting and stuff but £555m is insane!!! 
it seems like theres just too much reliance on these private firms and not enough on our own public services... 
lets hope they come up with some better solutions soon! 
These companies are making so much money off of councils' desperation - £2.1 billion for one company alone is just insane! 
And what about all those frontline services that are being taken away from residents? It's not just about the money, it's about the people who are getting affected by these decisions. 
I mean, what happens when the companies decide to leave or raise prices? Who's gonna pick up the slack then? 
It's not just about getting cheap advice for a year, it's about long-term sustainability. I think we need to rethink how councils work and make sure they're serving our communities, not just lining the pockets of private firms. 
. And the fact that Matrix SCM received contracts worth over £2.1 billion since 2010 is just crazy 
. And I think it's time for our councils to take back control of their services and stop relying so heavily on private firms 
. The long-term sustainability of local government is at stake, and we need to take action 
.