The BBC’s Today Programme is headlining on news that up to 100 'back office technical' jobs are to be offshored to India from Service Birmingham, Birmingham City Council’s IT and BPO joint venture with Capita, by the end of 2011. As we noted here Glyn Evans, Birmingham’s corporate director of business change, and man who led the transformation programme and subsequent Service Birmingham JV, moved last month to take the role of SOCITM president. Evans will no doubt be breathing a sigh of relief today.
While this kind of announcement is sure to enrage the unions, we are more sanguine since this is by no means the first time offshoring has taken place in local government outsourcing, or indeed in the broader public sector. In Tola Sargeant’s report Offshore suppliers in the public sector, there are a number of examples of offshoring taking place in public sector joint ventures and in local government. Suppliers have been using offshore services as part of their service delivery arsenal for some time, helping them reduce the cost of delivering application services, IT support and even back office administration for their clients. Some of this goes on ‘under the covers’ but there are plenty of examples where it goes on explicitly. So the offshoring issue really isn’t anything new.
But the trend is definitely accelerating as public sector now grapples to make unprecedented cost savings. In the past eighteen months, we have seen the first major local and central government outsourcing take place with Indian heritage company TCS at Cardiff Council (see here) and the £600m BPO deal at the Personal Accounts Delivery Authority (PADA) (see here) – PADA will have as much as 60% of its development staff located offshore, whereas Cardiff does not give any explicit plans.
Where things become less clear is how offshoring impacts plans for investments in the ‘onshore’ staff, such as in the retraining of personnel and moving them into other higher value areas such as front line services. In the Service Birmingham example, the council says it is on track to meet its target for the creation of 700 jobs by 2013. But if offshoring is to be seen as more than just a cost cutting exercise, more needs to be made of the resulting initiatives onshore to improve front line services through skills development, training and resourcing.