Private Equity Controls Significant Share of UK Public Contracts
Research reveals that one pound in every eleven spent by the UK government on contractors in the year to April 2025 was allocated to companies controlled by private equity firms. These firms operate across critical sectors including transport, waste management, and healthcare.
Concerns have been raised by politicians and economists about the financial instability and aggressive cost-cutting measures often associated with private equity-backed companies. These firms typically carry high debt levels and face conflicting interests when managing public services with a profit motive.
Private equity firms are investment entities that pool capital from investors and banks to acquire and manage companies, aiming to resell them for profit. The rapid expansion of private equity involvement in public and private services has been described by some as a “financial pandemic” that the government has yet to fully comprehend.
Exclusive analysis by found that nearly £24.4bn of public spending on contractors was directed to companies majority-controlled by private equity in the year ending April 2025. This represents 8.8% of government contracts.
The investigation utilized procurement data from the public sector market intelligence firm Tussell, company filings, financial data from PitchBook, and publicly available information to reveal the extent of private equity’s presence in UK public services.
Local councils awarded nearly £9.8bn in contracts to private equity-controlled companies, accounting for approximately 10% of their external spending during the same period. This includes over half a billion pounds paid to an infrastructure group providing water, energy, transport, and telecoms services, controlled by CVC Capital Partners.
The National Health Service (NHS) allocated more than £5bn in contracts—10.7% of its external spending—to private equity-backed firms last year.
Among the largest recipients were a business software company jointly controlled by Hg Capital and TA Associates, which received nearly £1bn, and a pharmaceutical and healthcare services company managed by London-based Vitruvian Partners, which was awarded almost £500m.
has previously reported on the increasing role of private equity firms in the provision of children’s care across England and the significant amounts of taxpayer money paid to such groups for support services.
UK Private Capital, the industry body representing private equity and venture capital, stated that these firms play a vital role in the British economy by enhancing productivity, attracting international investment, and fostering innovation.
However, the growing influence of private equity in the UK economy has raised concerns, especially following the collapse of private equity-backed companies in the care sector and other industries.
The crisis involving Thames Water was a notable example, with private equity linked to fears of closures and job losses in the care sector and the emergence of food banks in deprived areas of England.
The transport sector also shows high reliance on private equity. Arriva, which operates multiple train companies and hundreds of bus routes in the UK, was acquired by US private equity firm I Squared Capital in 2024.
Almost £600m of the Department for Education’s external spending, representing 11%, was directed to companies majority-backed by private equity. This includes BPP Education Group, controlled by funds managed by TDR Capital, and Portakabin, acquired in June 2024 by French-based Antin Infrastructure Partners.
In response to ’s findings, UK Private Capital emphasized that private equity and venture capital firms contribute approximately 9% of the UK’s private sector GDP and support around 13,000 UK businesses, 90% of which are small or medium-sized enterprises.
They highlighted that the industry raised £58.7bn in 2025, mainly from overseas investors, which fueled business growth across the UK. They also noted that the largest private equity-owned companies are subject to regulatory oversight.
Criticism and Concerns Over Private Equity’s Role
Natalie Bennett, former Green Party leader and author of Change Everything: How We Can Rethink, Repair and Rebuild Society, described private equity as a “financial pandemic” in British society.
“We’ve seen a massive explosion of this. And fundamentally, if you are running something for profit, you’re often not running it for the benefit of the people who need the service,” she said. “Austerity and cutbacks in funding for local councils has absolutely led us here, but more than that, it’s been a triumph of ideology.
“We’ve accepted this ideological assumption that the private sector must be better. But we’re talking about the filthy rich. And it’s the most vulnerable who are paying.”
Bennett criticized the government for failing to impose stricter regulations to limit private equity profit-making in the children’s care sector.
“The government is trying to manage the mess we have, not chart a route out of the mess. But [private equity] will twist and dodge and turn and find a new way to play the system,” she said.
Ludovic Phalippou, professor of financial economics at the University of Oxford’s Saïd Business School and a leading academic voice on private equity, stated that the issue lies not with private equity per se but with the high levels of debt these firms often carry, which increases vulnerability to economic shocks.
“The core risk is not just ‘private equity’. It is for-profit provision, plus high leverage, in an essential service where the state has little room to walk away, and probably low competence in writing contracts and negotiating prices,” he explained.
Sarah Longlands, chief executive of the thinktank Centre for Local Economies, noted that private equity’s involvement in public services creates conflicting motivations that reduce service quality.
“That desire for profit maximisation will put downward pressure on the way in which services are operated and run, which is why you end up with a scenario where care workers are earning such low amounts.”
Longlands emphasized the need for local authorities to exercise greater scrutiny over contract awards.
“Even with a lot of government politicians, there’s an assumption that this is the way things are run now. But I think there are some really serious questions about how far we can afford to be agnostic about the economic model behind this.”
Methodology of Investigation
’s investigation into private equity’s role in the British economy combined procurement data from Tussell, employment data from the Office for National Statistics (ONS), financial information from PitchBook, publicly available data from Companies House, and company annual accounts.
Data from Companies House enabled to construct group structures for thousands of UK companies and identify their ultimate controlling parties as disclosed in annual accounts.
A Large Language Model (LLM) was used to gather information about each ultimate controlling party. A team of five journalists manually verified the LLM’s findings by cross-referencing annual accounts, company websites, news articles, and specialized private equity databases such as PitchBook. This process identified which parent companies were private equity firms or majority-backed by private equity.
The final list of private equity-controlled companies was matched with public procurement data for the financial year ending April 2025, provided by Tussell, to determine the amount of public money paid to these firms.
Additionally, Companies House data on primary economic sectors (SIC codes) was used. The LLM also extracted average employee numbers as reported in company annual reports, with a team of three people verifying the results.
Where companies published consolidated accounts, employee numbers reflected the entire group rather than individual companies. Some companies did not report employee numbers or had not filed accounts.
To avoid double counting, the number of employees in consolidated accounts was adjusted by subtracting employees listed in subsidiary companies. International employees of large employers were excluded when possible to count only UK workers.
The final deconsolidated employee numbers were aggregated by sector using SIC codes and compared with ONS employment data to estimate the proportion of workers employed by private equity-controlled companies.
’s methodology differs from analyses by the Bank of England and EY in company counts, periods analyzed, treatment of consolidated accounts, and types of companies included (excluding venture capital and private credit firms).
This analysis provides a snapshot of private equity’s involvement in the UK economy as of 2025.
Additional reporting by , , and .
