For anyone concerned about British government spending – be that on prisons, defence or even London’s new bike hire scheme – the solution is simple. Invest in outsourcing service firms such as Serco, Capita, G4S or VT Group, and join in the profits. All four companies have substantially outperformed the FTSE All-Share Index over the past two years. With significant income derived from stable public sector contracts, their outlook continues to brighten.

A reduction in government spending generally means an increase in the outsourcing of public services. In each of the past three recessions, government spending as a percentage of output has tended to bottom out two to four years after the recession’s trough. This bodes well over the next few years for outsourcing firms that can provide services at a cheaper price. Indeed, Serco has won a record £4bn in contracts so far this year.