More than £10bn of taxpayers' money a year is being paid to just 20 private companies, according to figures from the Institute for Government thinktank and the data analysts Spend Network.
Their report found the biggest suppliers hired by departments and councils were IT firms, but construction and outsourcing companies also featured heavily in the top 20.
According to the data, which has taken two years to collect and over 16,000 hours to analyse, the IT company HP is the largest single supplier to government with state revenue in excess of £1.7bn in both 2012 and 2013. Capgemini, another IT company, was second, with earnings of around £1bn in both 2012 and 2013.
Four of the top 20 suppliers appear to rely heavily on one department for their central government revenue, with HP and Telereal Trillium earning most from the Department of Work and Pensions, Capgemini from HM Revenue and Customs, and Babcock from the Ministry of Defence.
Serco, the scandal-hit outsourcing company under investigation by the Serious Fraud Office for allegedly overcharging for electronic tagging, earned more than £365m in 2012 and more than £445m in 2013, the data found.
The report's authors acknowledged the limits of the research, saying it was incomplete because not all government spending data is published and there were inconsistencies. However, it said the project was the most comprehensive effort to map public spending with private companies since the government first started publishing transparency data.
Gavin Freeguard, who led the research for the Institute for Government, said the project showed "how difficult it is to analyse who is contracted to provide our public services and what it costs".
"Cost is also just one part of contract transparency – government needs to be equally transparent about contract terms and the performance of suppliers funded by taxpayer money," he said. "We hope our analysis will prompt government to improve the quantity and quality of the data it shares so future analysis becomes ever-more accurate. We're also grateful to those companies named in the report for their cooperation and for providing their own data."
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