Public services are being exposed to the economic bad weather and to destructive market forces, because of an increasing dependence on a private “public service industry” - which has more than doubled in size over the past decade - warned the UK’s largest public sector union UNISON.

More than £70bn of taxpayer’s money now goes to the private sector and to private equity firms who increasingly own public services.

The warning comes ahead of the publication of a report on the “public services industry” commissioned by John Hutton at the Department for Business, which is examining ways of “increasing the role of the private and third sectors” in public service delivery.

The report was commissioned following intensive lobbying from the CBI and key firms already holding public service contracts worth billions of pounds.

The union is calling for an independent review of the way market forces are distorting public services and undermining service quality. It wants the government to take a look at the costly damage that private companies and privatisation are inflicting across the public sector.

Dave Prentis, general secretary of UNISON, said: “We need a genuinely independent review of the public services industry – one that asks whether its increasing role and influence is really in the interests of taxpayers and public service users – rather than simply asking multinational companies what would make their lives easier.

“Lately we’ve heard the usual complaints about the government listening to the trade unions too much, but now this exercise shows who’s really calling the shots.”

To head the review, Hutton appointed DeAnne Julius, previously a director at the multi-service company Serco.