Birmingham Council's offshore move could trigger public sector outsourcing exodus

Birmingham City Council is planning to offshore 100 jobs to India as part of an HR and IT services joint venture with Capita.

The move to outsource the council jobs could be the beginning of a wider local and central government offshoring trend, say experts.

The HR and IT services joint venture between Birmingham City Council and Capita is called Service Birmingham.

A Service Birmingham spokesperson said: "We are exploring how we could utilise some overseas expertise to help deliver a cost-effective addition to our existing Birmingham operation."

"We are talking about a limited number of back-office technical roles. No customer-facing staff will be affected."

"It is still early days and we will actively work with our trade union representatives as our plans develop."

Trade union Unite, which represents many of the workers, have called for a halt to the plans.

The union claims Service Birmingham has already brought workers from India to the UK to learn specific roles before the jobs are transferred to India. This is a practice used widely in the private sector, when businesses sign deals with offshore suppliers.

Peter Allenson national officer at Unite officer said: "It beggars belief that council workers will train workers from overseas to do their jobs, so Capita and Birmingham council can lift and shift them abroad."

"This is an outrageous decision and Unite will fight tooth and nail to stop this Tory-led council from exporting these valuable jobs overseas. Unite is demanding that Birmingham City Council halts its plans. We fear this could be just the tip of the iceberg and other councils could follow suit. Thousands of public sector jobs could go. Once these jobs go, they will not come back.

"Indian workers are not to blame, in fact with little or no trade unions to represent them we have genuine concerns about their treatment. The blame lies firmly with private companies prepared to go to any length to cut costs for profit and this Tory-led council which is encouraging them to get away with it."

Organisations offshoring work can use a loophole in the visa system that allows offshore service providers with UK operations to bring in staff without the need for a visa (see video below). Staff are often brought in for about a year to learn how to do a job currently completed by a UK worker. The role is then offshored.

Mark Lewis, head of outsourcing at law firm Berwin Leihton Paisne, says this could be the first of many local government offshoring deals. "This is interesting because we have been hearing for the last six months that local authorities had nowhere to go, in meeting cost cutting targets, but to send jobs offshore. Now we are seeing it happen."

"This could be the start of very significant outsourcing and offshoring in local government."

Lewis warned that local authorities will face challenges implementing these strategies. He says local authorities will have to catch up with the private sector and understand the finer points of offshoring. "There is a lot of detail that goes into offshoring contracts and local government and even central government are not familiar with it."

He says local authorities will also have to get used to the wrath of the trade unions as well as the costs associated with making redundancies.

Read this blog post for series of articles by a UK IT professional who had to train the offshore workers that eventually replaced him.