The consultant has suffered a slowdown in post-election work in the highways and school building sectors.

But Mouchel bosses believe the tide will turn later this year as councils turn to private companies to run their services.

An interim management statement released today said:  “We remain confident about the medium and long-term, particularly given the pressure that will remain on the public sector to find new ways to deliver services more efficiently.

“A number of local authorities are now looking to outsource services to the private sector for the first time and indeed, we expect opportunities to increase further once things start to settle down after the summer and as organisations move beyond short-term cost-cutting. 

“The new government has already made it clear that it expects the private sector to play a greater role in public service delivery and that there will be an increase in outsourcing opportunities.”

Mouchel has decided not to hive-off any other divisions following the announced sale of its Middle East business as part of a cost-cutting drive.

Plans were considered to sell the utilities division but the firm won more work than expected in the water industry under the AMP5 bidding round.

Wins include long-term contracts with Thames, Severn Trent, Wessex, South West, Yorkshire and Scottish Water.

The most significant success was the reappointment by United Utilities of the KMI+ joint venture, where Mouchel is in partnership with Kier Construction, Murphy Group and Interserve Project Services, for a further five-year period.