Birmingham City Council criticized for outsourcing IT services abroad

By Michael Smith (Veshengro)

Birmingham, UK: Opponents say plans to offshore 100 IT jobs at the council's joint venture with Capita undermines the city's future and Birmingham City Council has come under criticism for outsourcing IT jobs to India.

The jobs in question are within Service Birmingham, the council's joint venture with services giant Capita. So far, 17 jobs have moved to Capita's Indian facilities, and a total of 100 are expected to go by the end of the year.

Public services union Unite has called on the council to cancel the plan, while a local politician has said that it “undermines the future of Birmingham” by draining it of technology talent.

Service Birmingham was launched in 2006 as part of a ten year, £500 million change programme designed to deliver over £1 billion worth of benefits. Around 500 employees were seconded to the joint venture.

However, the coalition government's spending review demands that Birmingham City Council finds a further £300 million in savings on top of those benefits, half of which must be delivered this year.

The UK's public sector has traditionally refrained from using offshore IT resources, with the exception of the NHS at some stage, when things moved to India and went seriously haywire, but that appears to be changing in light of recent budget cuts. Last year, the UK's Personal Accounts Delivery Authority signed a software development deal with Indian outsourcer TCS.

Serco, the UK's other public sector services giants, this week acquired Indian business process outsourcing provider Intelenet, although it said the acquisition was designed to support its growing private sector business.

The problem that was encountered with the NHS some years back was that the people dealing with the records in India and who were handling calls were not very versed in English medical terms and got a few things seriously wrong.

I can foresee problems with so many things when it comes to outsourcing council and other government services to abroad, not the least of them being data security.

In fact, if any data is being handled this could be a violation of EU data protection laws in the same way as The Cloud is coming under fire for this if the cloud is based outside EU jurisdiction.

Birmingham City Council's action is yet another point that councils, rather than bringing salaries of their overpaid top executives down and cutting back office spending and waste either cut services altogether or outsource them abroad.

When the three councils in London, Hammersmith & Fulham, Kensington & Chelsea and the third which I have forgotten, merged their operations, including waste collection, IT, etc., positions in the services were lost but all three councils retained their directors.

Operations don't necessarily make the savings when you merge the operations of councils but sharing CEOs and other director level personnel does. Not that they seem to understand that.

© 2011