OUTSOURCING giant Capita today said it stood to benefit from Government spending cuts as public sector clients are forced to offload work to the private sector.

The group believes that while it may be hit in the short-term by austerity measures, the drive to slash public sector costs will offer it "significant opportunities" to pick up outsourced contracts.

It is already seeing a strong pipeline of work coming through for local councils, central government, health and defence departments, according to Capita.

The firm’s comments came as the group reported underlying pre-tax profits up 15% to £163.1 million in the first half of 2010.