The research commission by Interserve found outsourcing has already grown 6% from around 20% of all council services a year ago.

Councils claim to have made savings of 16% to date, but need to find another 18% by 2014/15.

Those councils looking to make greater than 25% efficiency savings or with larger budgets of over £100m plan to outsource up to 60% of all services.

Yet other councils aim to keep resources in house or share with other public sector providers, planning to outsource just a fifth of services by 2014/15.

Adrian Ringrose, chief executive at Interserve said: “Forward thinking councils are aware that they need a transformational change given the severe pressure on budgets for the foreseeable future.

“And 38% of councils consider there to be no service area, including Children’s Services and Public Protection, unsuitable for outsourcing.

“Although the results show that a percentage of councils continue to procure more traditional service models, the challenge of meeting these current targets while not reducing the level and quality of services will require councils to radically rethink how they procure services.

“In our experience if the delivery model is focused around results and not processes, the private sector can support councils in their focus on delivering improved front line services.”

The report also found that:

• 44% of councils state local political concerns are a serious barrier to outsourcing.
• 44% of councils still haven’t implemented a strategy to deal with their budgetary challenges to 2014/15, down from 79% this time last year.
• 81% said outsourcing to a commercial partner had been successful, and 82% believe that outsourcing has a role to play in achieving their targets.
• Councils expect only 20% of outsourced council services to be provided by the third sector by 2015; and half to be provided by commercial providers by 2015.
• 16% fewer councils believe that the voice of the community will affect future measurements compared with 2011’s results.
• 57% believe that Community Budgets will have no effect (41%) or even reduce (16%) councils’ ability to meet their targets.
• Councils expect a 15% reduction in the size of their built estate.

The full report ‘Local services – in need of transformational change’ is available to download free of charge from www.local-government.interserve.com.