Public sector organisations are on average paying 40% more than the private sector for equivalent outsourcing deals, according to the findings of a study published in June.

Analysis by Compass Management Consultancy claims that public sector agencies pay approximately £6 billion more than necessary per year on IT services contracts. The figure was calculated by comparing prices paid in the public sector over the past five years with “comparable” deals in the private sector.

“This poor performance reflects a combination of questionable procurement practices and inadequate management of the demands that public sector clients make on the service provider for extra services and customisation which drive up costs,” said Gary Bettis, UK president for Compass. “Government departments are still far too timid in their thinking and too cautious about transforming both sides of an outsourcing deal.”