Industry news

Capita Managed IT Solutions has been assigned by the Crown Commercial Services (CCS) to the national ICT Services for Education Framework Agreement.

Capita will now have the opportunity to bid to deliver technological solutions to service the needs of the UK’s educational establishments. The agreement was put in place by the CCS to provide educational bodies with easy access to IT suppliers who are best equipped to help them.

Over £300 million in revenue will be available to Capita and other providers involved in the agreement over the next four years.

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Related: Capita announces 11% rise in pre-tax profit with £1.6 billion in major contracts secured

The National Outsourcing Association has released its latest research examining the availability of important skills in the UK in order to ascertain whether the country is ready for global outsourcing leadership.

The research, which surveyed both buy and supply-side NOA members, found that the feeling in the industry about outsourcing’s growth potential over the next five years was strongly positive, with buyers returning an average positivity rating of 66 per cent and service providers responding with a more optimistic 76 per cent.

The general consensus strongly suggested that, in order for the UK to become the number one country for supplying high level services, UK-based suppliers must first and foremost be able to irrefutably prove the business value behind the services they provide.

The research concluded: “if there’s one last message to be taken away from this research, it’s this: regardless of whether they’re being recruited, trained or retained, people are the key to making outsourcing work.”

This opinion was reflected strongly from all sides. A top concern from suppliers was their inability to recruit the right people; buyers were troubled by the quality of staff working for their service providers. Across the board, the training of existing employees at all levels was seen as the best way to address skills issues in the UK.

A lack of enthusiasm for apprenticeships and reshoring contradicted key aspects of the government’s plans for the future of UK business, which appear to fall short of the NOA’s vision for the UK to become outsourcing’s global strategic hub within this decade.

Read the full research report.

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Related: Local councils embrace outsourcing as part of austerity-driven innovation push

Some outsourcing service providers contracted by the UK government to run British immigration detention centres are threatening to pull out of these deals if the government doesn’t try to rebalance incentives, the FT has reported.

Seven of Britain’s 11 immigration centres are run by private firms Serco, G4S, Mitie and Geo Group, while the Home Office is responsible for maintaining the other four.

However, over past years the profit margins involved in running these centres has fallen significantly. In November 2014 Mitie secured an immigration centre contract with the government worth just £180 million, 30 per cent less than similar contracts signed previously with Serco and Geo Group.

With potential profits falling to this extent, some of the companies involved are questioning whether the lower revenues are worth the significant risk of reputational damage that can come from this line of work.

An executive involved with one of these firms told the FT: “These contracts aren’t risk free. Any commercial company will have to look at the reputational risk as well as the financial risk, and if the government isn’t willing to address some of the issues, they will drive companies out of the market”.

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Related: Government spending on shared services sees meteoric rise since 2010

In reaction to a letter written for the Guardian by Mark Serwotka, general secretary of the Public and Commercial Services union, National Gallery director Nicholas Penny has penned his own Guardian article ironing out some of the vagaries and misconceptions concerning the gallery’s intentions to outsource.

Penny began by pointing out some inaccuracies in Serwotka’s original article, explaining that the procurement process for outsourcing some visitor services was not brought forward, and that the timings for each stage of the tender were made public and not deviated from.

Penny went on to assure existing employees that “there will be no redundancies, and terms and conditions of employment will be protected”. He also explained that any employees transferred will continue to be paid the London living wage at minimum and will enjoy additional benefits working for new service provider Securitas.

Plans for the National Gallery to outsourcing jobs such as security, visitor services and ticketing were announced roughly a year ago, in order to improve the level of service offered by the gallery.

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Related: UNISON expresses concerns over Northamptonshire County Council’s extensive outsourcing

Construction services operator Carillion is among a total of 19 suppliers chosen by the government to service its new Facilities Management Services agreement.

The project involves a standardised pool of facilities management resources that government departments and other public sector bodies will subsequently use. Ultimately up to £4.1 billion of services could be outsourced under the new agreement between now and July 2019.

The agreement replaces an old framework for facilities management contracts and should save taxpayers somewhere in the region of £200 million.

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Related: UK service providers threaten to pull out of immigration detention centre contracts

Professional Outsourcing has reported that the Indonesian government’s ban on outsourcing – instigated in 2012 to stop local jobs moving overseas – has failed in its intentions, as many of those low level jobs are now serviced through robotic automation instead.

The decree only allows Indonesian companies to outsource five kinds of roles: cleaning, security, driving, and support services such as mining sites and catering. In the case of alternative roles, it is possible that the uptake of automation has actually driven further unemployment since the law was passed.

In the Jakarta Post, chairman of the Indonesian Outsourcing Association (ABADI) Wisnu Wobowo commented: “Jobs that were handled by people in the past are now filled by machines.”

He cited banks and toll road companies as just a few examples of firms that had started to adopt automation: “To some extent automation is inevitable, but the decree has accelerated the process.”

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Related: Meet the fastest growing Indian companies in the UK

Transport for Greater Manchester (TfGM) has ended its outsourcing contract with Atos. In 2012, a deal was agreed where Atos would design and introduce a new oyster-style transport payment system to be used by Manchester’s citizens.

By October 2014 the new system was put in place for 500,000 concessionary travel pass holders in Greater Manchester, which is now used around 60,000 times a week. However, delays to the wider roll-out of the system have been cited as the main reason for the contract’s termination.

“The parties have decided it is in their best interests to agree to a mutual termination of the contract, on commercial terms, the details of which remain confidential between the parties,” said TfGM and Atos in a joint statement.

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Related: Tata Motors procures Accenture’s services to cut down on bureaucracy

Figures from the latest arvato UK Outsourcing Index have shown that shared services accounted for £1.2 billion in central government outsourcing since the 2010 Treasury Spending Review, in comparison to a measly £58 million in the five years beforehand.

arvato suggests that the 2010 HM Treasury Spending Review “heralded a huge surge in demand for shared services in the public sector”, hence the significant rise in public sector shared services spending.

Such trends are more than likely to continue, with George Osborne’s latest set of austerity measures motivating government, on a local level in particular, to search for more innovative ways to cut costs while maintaining or even improving services.

Debra Maxwell, CEO at arvato UK, commented: “Central government departments moved quickly to work with private sector partners to drive their shared services agenda as part of their strategy to deliver billions of pounds in savings.

“Though shared services was not new within government, private sector outsourcing partnerships can bring in the necessary expertise for real, large scale transformation, including the drive to standardise processes and implement new technology platforms to do the job.

“With departments likely to be asked to deliver even more efficiency savings in the forthcoming Spending Review this autumn, the drive to share services will only grow.”

Read more here.

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Related: Public spending cuts pose serious risk to Britons’ “health and wellbeing”

In anticipation of the end of the Aspire contract held between HMRC and various service providers, due in 2017, Capgemini has agreed to transfer 250 “business-critical” employees to HMRC by December 2015.

The personnel transferred will be those working on either the Case Management unified platform, the Customs and International (Excite platform) and other third-party supplier contracts.

“We have an ambitious digital vision – to transform our IT services and use the data we hold in smarter ways, so we can deliver world-beating digital services for our customers and colleagues,” said Mark Dearnley, chief digital and information officer at HMRC.

“The changes we’re announcing today will allow us to maintain consistency of service for customers while we plan for the future which, as now, will include a mixed model of both internal and external delivery using multiple partners.”

The Aspire contract was worth £800 million-a-year, and involved Capgemini and Fujitsu as service providers. In June HMRC issued a £20 million tender for consultants to advise on how to shift away from this current arrangement, towards a deal that will involve a larger network of smaller IT service providers.

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Related: Local councils embrace outsourcing as part of austerity-driven innovation push

Grant Thornton UK LLP has revealed the top 36 fastest growing Indian companies in the UK, as part of its report “India meets Britain: Tracking the UK’s top Indian companies”.

The list contains a mixture of obscure and well-established names, with the top five being as follows:

Rolta India Ltd (359% latest growth)

Bharti Airtel Ltd (320% latest growth)

Essar Global Fund Ltd (107% latest growth)

Secure Meters Ltd (53% latest growth)

TV Sundram Iyengar & Sons Ltd (49% latest growth)

Some of the better known organisations listed included WNS Holdings Ltd (12th), Tata Motors Ltd (17th), Tata Communications Ltd (29th) and HCL Technologies (34th).

It is possible that the future growth of these companies may be affected by the UK government’s proposed new rulings on intra-company transfers (ICTs). Its intention is to reduce the number of individuals working in the UK from outside of Europe through raising minimum pay thresholds, reforming the skills shortage list and introducing an addition charge for ICT visas.

Download the full report.

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Related: Tata Motors procures Accenture’s services to cut down on bureaucracy