The public spending watchdog has demanded more transparency to tackle a “crisis of confidence” over the Government’s use of private firms to deliver services.
The National Audit Office highlighted a series of investigations into alleged abuses by contractors, and insisted more openness was needed around performance and profits.
They set out the scale of private involvement, with Serco holding public sector contracts worth £1.8 billion - including £611 million with the Ministry of Defence and £382m with local government.
Capita has deals totalling £1.08bn, while the figures for G4S and Atos are £718m and £683m respectively.
The NAO welcomed moves by the Cabinet Office to exploit the Government's spending clout to drive savings.
But it cautioned that the department often lacked "commercial experience and expertise below senior levels", and the information on its 40 strategic suppliers was "inconsistent and incomplete".
A CO spokesman said: “The Civil Service lacks commercial capability and contract management needs to be improved. Our reform programme seeks to address this.”