UK Firms Open to Outsourcing

Reuters

LONDON: Britain should think about shifting some of the functions performed by its civil service offshore, says the Confederation of British Industry (CBI).

Scores of high-profile firms, including British Airways and HSBC, have shifted thousands of customer service and IT support jobs out of the UK to countries like India, where wage costs are a fraction of those in Britain.

And in a submission ahead of the government's Comprehensive Spending Review (CSR), due later this year, the CBI said much of the work of public servants in IT, human resources and finance could also be carried out more cheaply abroad.

"There is no reason for back office functions to be replicated by many civil servants sitting in expensive office blocks or sitting in the UK at all," the CBI said in its report.

Nearly a fifth of Britain's workforce, or just under six million people, are employed in the public sector, more than a million of whom work in public administration.

The CBI reckons most of the work they do could be streamlined and calculates that more than 500 million pounds could be saved over two years by combining or outsourcing it.

Finance minister Gordon Brown has already pledged to generate cash savings of 21 billion pounds a year by increasing efficiency within government departments and has announced a 5 per cent cut in administration budgets in the CSR period. The Treasury says the cash savings will be re-invested in frontline services such as health and education.

Local cuts

According to CBI director of public services, Neil Bentley, local councils could also generate huge cost savings by bundling the processing of benefits claims and payrolls administration, for example, and exporting or outsourcing it to private firms.

"Off-shoring is a model the private sector has used for many years and it works for them, but we need to think seriously whether it would work for the public sector," Bentley said.

"Instinctively we think it might but more work needs to be done to investigate whether it would bring the cost savings it might." The move might not go down so well with consumers, however.

Britons' growing complaints about poor service by call centres and worries their personal information may fall into the wrong hands has already prompted one major high street bank, Lloyds TSB, to bring back its call-centres to the UK.