The bosses of four of the world's largest service providers, including G4S and Serco which run Australian immigration detention centres, have faced questioning in Britain's Houses of Parliament.
The Public Accounts Committee called on the executives to explain themselves after a series of multi-million-dollar blunders.
The British investigations are unrelated to their outsourcing operations in Australia but a member of the British Public Accounts Committee says people in Australia should be concerned.
Like in Australia, an increasing number of government services, including prisons, detention centres, schools and hospitals, are being managed by private companies.
UK Opposition Labour MP Austin Mitchell says Australians should be concerned by what has happened in Britain.
"A lot of things that have been made worse under this government were started by the Labour government, that goes for privatisation and outsourcing like this, it goes for reducing the functions of the state.
"The Labour government did a lot of good but because spending was so high, it tried to economise in this fashion, and therefore it opened the door for the conservative government which believes in reducing the power of the state as an ideology, it opened the door for the conservative government to do it on a much bigger scale."
UK INQUIRY 'HAS IMPLICATIONS FOR AUSTRALIA': LOEWENSTEIN
Independent journalist Antony Loewenstein has been following the activities of multinational companies G4S and Serco in running detention centres in Australia and the UK.
He has told SBS that the developments in the UK have significant implications for the management of Australia's detention centres.
"Most people don't even know what they do here. They don't get a lot of press, which is how they want it," Loewenstein says.
He says the track record of Serco's management of detention centres in Australia and overseas in the past year is revealing.
"Human rights abuses, understaffing, undertraining, [there's] a lot of abuse going on, both towards asylum seekers but also the guards themselves are often mentally traumatised and the Australian government is well aware of this. This is a bipartisan issue."
Despite the documented incidents of poor management and transgressions, Loewenstein says G4S and Serco have shown little accountability and continue to receive contracts.
"Serco has been running the Australian detention centres since 2009 in the Kevin Rudd Labor government. The contract then was $370 million roughly. 2013, we don't have an exact figure but roughly $1.86 billion plus. Of course there's been a massive surge in boats in the last year so there's more people in detention.
"And one of the things that is not examined enough is the fact is that it is known that the record of G4S and Serco, particularly in Britain for juvenile justice prisons, prisons in general, immigration detention centres is bad."
Listen: Antony Loewenstein speaks to SBS reporter Stefan Armbruster
He says the Australian government still sees the benefits of outsourcing and privatising the management of detention centres outweighing the disadvantages.
"There is a weird disconnect. And I think both sides of politics in Australia and the UK somehow believe that is more efficient, so to speak, or cheaper, or better to have a private corporation managing the most vulnerable people. And the record shows the exact opposite."