David Cameron says UK is 'open' to outsourcing
In what may be described as a ‘major relief’ for the Indian IT and BPO firms offering services to the European market, the British Premier David Cameron has asserted during his visit to India this week that the United Kingdom was ‘most open’ to the suggestion of outsourcing work to other cheaper locations. A news website report quotes Cameron as saying that as far as the issue of outsourcing is concerned, one would find Britain among the most liberal and advanced nations across the globe.
Talking to newspersons in India, Cameron said that presently his new coalition government is evaluating the deals signed with IT and BPO vendors thus far. He said that the government is basically trying to ascertain the cost of the services vis-à-vis the worth of its money spent on them. According to Cameron, this is nothing unusual, but common like in any other business.
It may be mentioned here that soon after the Cameron assumed power in Britain following the recent polls, the government had announced to review all IT contracts keeping in view the cost-cuts initiated by it in the wake of the prevailing debt crisis as well as to uphold its pre-poll commitments. This has given rise to panic and apprehension among the IT majors who had signed large contracts with different government departments in the UK. There were reports that most of the large contracts would be subjected to renegotiation or cancellation.
In fact, Tata Consultancy Services (TCS), India’s largest software exporter which had entered into a £600 million contract to administer the employment savings trust in Britain, is also expecting a renegotiation of the deal. Several news and industry websites in Britain had condemned the TCS deal with the Personal Account Delivery Authority (PADA) of the UK government. Expressing his surprise over the hasty manner in which the deal was signed, the then shadow pensions minister of the Conservative Party, Nigel Waterson that the Troy would call for a review of the contract if elected to power.
Meanwhile, Som Mittal, president of the National Association of Software and Services Companies (NASSCOM), the nodal body of Indian IT services vendors, informed that Britain contributes approximately 18 per cent of the revenue generated by the Indian firms through BPO, IT and engineering services. Welcoming Cameron’s statement, he said that this was different from the stand adopted by the US President Barak Obama regarding outsourcing of jobs from America. Fulfilling his pre-poll commitments, Obama had put an end to the tax incentives enjoyed by the US multinationals that outsourced their jobs to other locations, including India.