Outsourcing across Scotland’s local authorities up by 40 per cent, says STUC

Scotland’s largest trade union body has called for a major shift in how public services are delivered, warning that a sharp rise in outsourcing is draining billions from the public purse.

The Scottish Trades Union Congress (STUC) said new analysis suggests outsourcing across Scotland’s local authorities has increased by as much as 40%, outpacing both inflation and spending on directly employed council staff.

The figures, unveiled ahead of the STUC’s annual congress in Dundee, come alongside earlier union estimates that up to £3 billion is being lost from Scotland’s public sector in the form of private profit.

The organisation is now urging ministers to commit to a large-scale programme of “insourcing” — bringing services back under public control — as part of what it describes as a wider plan to rebuild public services.

The STUC analysis — which draws on procurement data, FOI responses and finance statistics — suggests total procurement spending by local authorities has increased by 53.9% in the four years to 2023-24, with external spending on services rising by 37.9% and third-party payments increasing by 26.4% over a similar period.

All three of are higher than the increase in employee costs of 24.7%. The STUC says this “suggests spending on outsourcing is outstripping spending on wages”.

Even when inflation is taken into account, procurement spend has increased by 26.9% in the four years to 2023-24 while external spend on services has increased by 10.66% and third party payments by 1.41%.

A motion backed by the STUC General Council calls on the next Scottish Government to “ditch the drain” of outsourcing and instead invest in publicly delivered services through progressive taxation.

The call comes as most parties put shrinking the public sector at the heart of their plan to tackle the looming £4.7 billion black hole in Scotland’s public finances.

The Scottish Government’s own Public Service Reform Strategy, published in June 2025, promised to make public services “efficient, effective, and fiscally sustainable by embedding a culture of continuous improvement and collaboration across the system”.

The primary mechanism for this is a “managed, downward workforce trajectory of 0.5% on average per annum to 2029–30”.

Analysis by the think tank IPPR Scotland has suggested that as many as 20,000 public sector jobs could be lost by the end of the decade.

Ministers have previously warned that, to meet their targets, some of the redundancies may need to be compulsory.

Roz Foyer, the STUC’s general secretary, said communities were facing “the grotesque scenario of paying more for their public services, for reduced quality” while billions were “siphoned out in pure profit for private shareholders”.

She added: “If the next Government really wants to get to grips with so-called ‘waste’ from the public sector then it must come up with a plan for insourcing our outsourced public services.

“It’s little wonder apathy and anger is rife throughout working-class areas in Scotland, with workers feeling the economy does not work for them.”

The STUC congress, which runs from today until Wednesday, is expected to hear from First Minister John Swinney, Scottish Labour leader Anas Sarwar and Scottish Greens co-leader Gillian Mackay.

Outsourcing across Scotland’s local authorities up by 40 per cent, says STUC

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