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Cath Everett

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Cutting the deficit: off-shoring could be the answer


So the 2010 election delivered a hung parliament: whoever eventually fills the power vacuum for good should consider offshoring thousands of civil servant jobs, including HR and finance roles, in order to cut the huge public deficit. 

This is one of the key recommendations from a policy paper entitled ‘We can cut the deficit: Ten proven ways of reducing the public sector deficit while improving public services’, which was published by the Management Consultancies Association (MCA).
The paper, which has been circulated to senior figures within all three of the main political parties, outlines how eight of its top members believe that public procurement could be revamped, the value of existing assets unlocked and back office functions made more efficient. Such action, they claimed, could save government more than £25 billion per annum, while protecting frontline services.
PricewaterhouseCoopers (PwC) attested that £4 billion could be saved each year by both outsourcing and offshoring HR, finance and procurement functions as well as by introducing more shared service centres and re-engineering business processes in these areas.
Dave Allen, a partner at the firm, said: “A mandate is needed from the top, with the centre asserting the need for shared services to cross organisational boundaries, and considering the transfer of existing central government shared services to centralised ownership. This would permit the aggregation and extension of services under arms length arrangements.”
Will Benn, a partner and head of public sector consultancy at Alsbridge agreed, claiming that, although offshoring civil servants’ posts had traditionally been considered too sensitive due to data privacy and security issues and political concerns over losing UK jobs, the time was now ripe.
“An immediate way for a new government to save money on the overhead cost of generic administration is to send the work offshore. Not passports, defence or intelligence work – just the standard transactional work of finance and administration,” he said.
Such a move would enable the top five spending government departments to save about £10 million each per year, which amounted to quarter of a billion over a five year term, Benn added.

One Response

  1. Offshore the jobs?

    "Such a move would enable the top five spending government departments to save about £10 million each per year".

    This is hardly a huge dent in the overall deficit, is it?

    And do these figures take account of the lost tax revenues (both corporate and income tax) from off-shoring these tax payer-funded jobs. (Remember – tax rates will rise dramatically whoever forms the next Government). Or the loss of aggregate demand within the UK economy that we would be taking out.

    It does have one advantage, however. No doubt the member companies of the Management Consultancies Association will profit from the front-end consultancy advice they will be asked to provide in order to achieve this proposal.  DOH!


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