A council’s role is to protect citizens’ services, not jobs, Birmingham City Council’s Glyn Evans has told Computerworld UK, as a row erupted over his local authority’s outsourcing and offshoring strategy.
Around 100 back office, technical jobs at Service Birmingham, a joint venture between the Council and Capita, which was given a £1 billion contract to provide ICT, contact centre and revenue services until 2021, are expected to be offshored to India at the end of the year.
“What’s important is we are delivering good value for money to the taxpayer. We don’t exist to protect jobs,” said Evans [pictured], who was last month elected president of public sector IT managers’ association Socitm.
The trade union Unite, which represents Birmingham council workers and staff at Service Birmingham reacted strongly to the move.
“We fear that this could be just the tip of the iceberg and other councils could follow suit. Thousands of public sector jobs could go,” said Unite’s national officer Peter Allenson.
Unite claimed the council is preparing to bring some staff from India to Birmingham to shadow current employees and learn how to do the roles.
“It beggars belief that council workers will be forced to train workers from overseas to do their jobs so Capita and Birmingham council can lift and shift them abroad," Allenson continued.
Analyst group TechMarketView said: “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."
However, analyst John O’Brien said public sector offshoring had to be handled carefully. “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,” he said.
Glyn Evans, a driving force behind the creation of Service Birmingham, would not rule out further offshoring. “In the current financial climate, we have got to continue looking at options to deliver value for money,” he said. “I don’t think anything is off the table.”
Birmingham needs to find £300 million a year in cost savings over the next three years following government cuts imposed in the Spending Review. In February, it announced plans to increase outsourcing and expand its shared services efforts.
With pressure mounting to cut public sector IT costs, Socitm has warned councils, in a report, “Costs of outsourcing – uncovering the real risks,” on the potential pitfalls of outsourcing and suggested that pursuing a shared services strategy should be the first option.
According to Evans, organisations should do what is right for them. “You have got to find the route that suits you. There is nothing in principle for or against outsourcing, and there are many different models of service delivery.
“[When Birmingham City Council began outsourcing in 2006] Service Birmingham was the right answer.
“We didn’t look at shared services predominately because the timing to set it up would have been too lengthy and building consensus in the West Midlands would have taken a lot longer than that,” he said.
However, the new Socitm president recognised that a number of local authorities are currently establishing shared services operations, such as the merger of Hammersmith & Fulham Council, the Royal Borough of Kensington & Chelsea and Westminster City Council in London. Birmingham had not completely closed the door on shared services, he added.
“There is nothing to stop [organisations] looking at sharing services with Service Birmingham. Absolutely [that is an option we are open to]. We have to find ways right across the public sector to save money,” he said.
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