A third of all public services - far more than previously thought - are now delivered by the private and voluntary sectors, according to a report commissioned by the government that for the first time reveals the extent to which public service provision has been transformed by the private sector.

The study by DeAnne -Julius, an economist and former member of the Bank of England's monetary policy committee, shows the public service industry has doubled in little more than a decade and now embraces everything from health to waste management, IT, welfare-to-work, training, construction and legal services.