SHAREHOLDERS in Britain’s seven biggest outsourcing companies have seen their dividends balloon by two thirds since 2010 as the government runs public services further into the ground, according to new TUC research published today.

The firms handed outsized payouts to shareholders even as pre-tax profits fell by almost a third over the same period, analysts found.

Shareholders in the companies raked in a whopping £642 million combined in 2010.

And some even continued to line shareholders’ pockets as they suffered losses, which the TUC said revealed a “fundamentally flawed model.”

The TUC said its research found that reforms were needed to protect public services in the wake of the collapse of outsourcing giant Carillion.

Carillion went into liquidation three months ago and thousands of people have lost their jobs as a result.

The TUC report says that Carillion’s collapse highlighted the problem with running a low-cost, low-quality business in the interests of corporate shareholders.

The way in which firms outsource risk leads to a “complex web” of unaccountable subcontractors.

TUC researchers urged the introduction of a raft of measures to regulate contracts and ensure transparency.

They also called for the strengthening of workers’ rights and for sweeping reforms relating to the role of the director in public service work.

TUC general secretary Frances O’Grady said that Carillion’s collapse “put the spotlight” on private firms “hoovering up public services contracts with little public scrutiny.

“It showed how these contracts line shareholders’ pockets instead of serving the community.

“We need to get back to running public services for the common good. Front-line staff work hard and aim high because they care about the community they serve. That should be the motivation for public service managers and boardrooms too.

“The government needs to rethink outsourcing. Most services would be better off back in public hands.”