UK outsourcing to India continues despite protests
The economic logic of outsourcing operations to India continues to direct the growth plans of major companies.Updated: Feb 10, 2007, 13:22 IST
As Indian investors stalk British companies with takeover offers, the economic logic of outsourcing operations to India continues to direct the growth plans of major companies, despite protests from the affected employees.
Tata Steel has been the latest big budget Indian investor, having taken over Corus in January. The spate of takeovers by Indian investors and the creation of jobs in Britain has partially reduced the decibel level of protests against outsourcing to India.
The National Health Service (NHS) has announced that it will export hundreds of clerical jobs, including accounting functions, to India. "I recently gave permission to outsource 60 per cent of the work to India," NHS deputy finance director Peter Coates said in Mumbai.
"It could go higher, but the constraint is that we cannot move jobs to India at the expense of shedding jobs in the (United Kingdom). Politics will be an important factor," he added.
The latest traffic of outsourcing from Britain to India involves the insurance giant Prudential, which this week confirmed that it will offshore 130 jobs from its main Scottish site to India over the next 12-18 months.
The company, which employs more than 2,500 people at Craigforth, near Stirling, said the jobs would be moved to Mumbai - alongside a further 80 currently based in Reading. It said the move was part of its pledge made last year to cut 150 million pounds from the costs of its UK business.
The latest move follows the decision by the company in April 2006 to move 200 jobs to Craigforth and 230 to Mumbai, as it closed three out of five of its UK sites at Belfast, Bristol and Holborn Bars in London.
Bank major Lloyds TSB, which already has a significant presence in India, announced the closure of its back-office operation at the Thorpe Wood service centre in Peterborough this year.
The Lloyds TSB Group Union claimed that the decision to close the centre was linked to plans to relocate more back-office roles to India, where the bank has around 2,500 workers.
Peter O'Grady, assistant general secretary of the union, said: "Our concern is over what is going to happen to the people in Peterborough. We want to embarrass Lloyds TSB into keeping these jobs within the UK."
A Lloyds TSB spokesman confirmed that the bank had set a "target" to relocate a further 400 back-office jobs to India this year, but denied the Peterborough closure was related.
He said: "We took a very difficult decision to close Peterborough, but these jobs will be moved to other parts of the UK - not outsourced to India. We are speaking to all the individual staff affected at the moment. We have a good track record in redeploying staff elsewhere in the group, but there will inevitably be some natural turnover."
Another firm planning to 'look India' is Thomson Scientific, a multinational information firm, which intends to close its Scottish office in Glasgow and shift the work to India. The company is also likely to axe jobs in Manchester and London.
A company spokesperson said: "In order to continue to maintain our place in the market we need to take action now."
Meanwhile, hospital officials in Birmingham have become the latest to join others in Britain to consider sending confidential hospital notes to be typed up in India. Many hospitals in Britain have already outsourced such work to India.
Reports from Birmingham say that the Dudley Group of Hospitals Trust, which includes Russells Hall Hospital in Pensnett, is planning the cost-cutting move to India.
Suzie Fothergill, spokesperson for Dudley Group of Hospitals Trust, said: "In response to the Birmingham Mail's enquiry regarding outsourcing administration to India, the trust is carrying out a scoping exercise with a view to looking at recommendations for the future. At this stage it is only being reviewed."
The University Hospital Trust in Edgbaston was the first in Birmingham to send administrative work to India, New Zealand and South Africa in August last year.