Outsourced services similar size to finance sector

19 May 2011

Turnover across all outsource sectors is £207bn – equivalent to 8 percent of the UK economy – compared to 8.1 percent for the financial services sector.

A report by Oxford Economics produced to answer the question posed by the Business Services Association about how big the outsource services sector is in the UK, estimates that outsource services contribute to about £115bn a year to the gross added value of UK output – that is 9 percnet of the total. The sector employs 3.1m people which is equivalent to 10 percent of all UK workforce jobs.

The value of the outsource services sector to the UK economy in terms of tax payable is not inconsiderable. It contributes £14bn a year in corporation tax, employers NI and business property rates, plus £21bn in employee income tax and NI totalling £35bn or 12 percent of all government revenues from these sources. As the report points out, that’s enough run the Department of Transport, the Home Office and the Ministry of Justice combined.

The report covers outsourced activities in both the public and private sectors, defined as ‘activites governed by an on-going or time specifi agreement involving a degree of delegation of management responsibility’.