Sharp growth in technology investment saw public sector spending climb to £2.9 billion last year, according to the Arvato UK Outsourcing Index.
The research, compiled by business outsourcing partner Arvato and industry analyst NelsonHall, showed that the total value of deals signed by public sector bodies rose 61 per cent year-on-year, from £1.8 billion in 2017 and £2.5 billion in 2016.
A surge in technology investment was behind the strong performance, with spending on IT outsourcing (ITO) agreements reaching £2 billion in 2018 – an 84 per cent year-on-year rise, according to the findings.
Central departments accounted for 95 per cent (£1.9 billion) of the ITO spend as they focused on procuring deals for data centres, cloud infrastructure and application management services.
The average value of central government contracts fell by eight per cent last year to £35.4 million, revealing that these organisations focused on smaller, more productised deals for technology.