BILLIONS are being wasted in Scotland every year “lining the pockets” of private capital as it profiteers from outsourced public services, according to a new report.

Research carried out by the Association for Public Service Excellence (APSE), on behalf of trade union body the STUC, has put the profiteering price tag at between £2 billion and £3bn a year.

The study found Scottish public services, like councils and the NHS, spend more than £16bn a year buying services, goods and works from external suppliers. Services overwhelmingly staffed by women, such as social care and soft facilities management were the most likely to be outsourced.

Social care, where low pay and insecure employment remain endemic, drew particular attention. Researchers found that 79 per cent of care home places across Scotland are provided by private firms, with 20 per cent of public cash propping up the sector landing in company owners and investors’ bank accounts.

STUC general secretary Roz Foyer said: “This report exposes the true cost of Scotland’s rip-off outsourcing crisis — a systematic extraction of public wealth on an industrial scale.

“Billions of pounds that should be paying for health, care staff, cleaners, refuse workers and local services are instead lining the pockets of shareholders and private equity interests, with not a penny reinvested into our public services.”

Echoing the report’s calls for the Scottish government to make direct public provision the default, begin a national insourcing programme, restore pay and pension losses suffered by outsourced workers, as well as make trade unions full partners in procurement oversight and reform, she added: “You cannot build a Fair Work economy on the backs of the private profiteering of our public services.  

“Insourcing, directly awarding services and embracing trade unions as partners in that endeavour is not only fairer but also economically smarter. 

“Every pound kept in public hands supports local jobs, local economies and better services.

“As we approach the election, Scotland cannot afford political silence from prospective MSPs who ignore the silent privatisation of Scotland’s public services.

“Public services are too important to be auctioned off to the lowest bidder and should not be handed to profiteers.”

A Scottish government spokesperson responded: “Through our Fair Work First policy we are leveraging employers’ commitment to fair work by applying Fair Work principles to public sector contracts where feasible.”