Sunday, 1 December 2013

Outsourced Britain

As austerity continues to bites one of the big features before and now very much more so after the great recession is the idea of outsourcing and it is really happening on a huge scale lets be frank. Outsourcing is a good way for capitalist to drive down labour costs during times of austerity. Take N Power this week. "Npower is to cut 1,400 UK jobs. PA Npower is to close offices and outsource work to India in a move that will see 1,400 UK staff lose their jobs at the energy supplier. The announcement is expected to intensify public anger around the activities of the Big Six power companies and raise the political heat in Westminster where energy has risen to the top of the political agenda. Trade unions accused npower of serving up a "Christmas nightmare" by planning to offshore 1,400 jobs to India and transfer a further 570 to another British firm, probably Capita. It is understood that frontline call-centre operations will be outsourced to a third party in the UK, with back-office work moved to India. Union leaders warned the moves would backfire and further tarnish the reputation of npower which came bottom for customer service in a recent survey and which told a parliamentary committee earlier this year that it had paid almost no corporation tax for three years. Npower, the energy supplier of Germany's RWE, hit gas and electricity customers with a 10.4% rise in fuel bills earlier this month and its central London offices were the target of fuel poverty demonstrations earlier this week. The company declined to comment on the planned office and staff cuts but well-informed sources told the Guardian that npower staff would be informed of the changes at 9am on Thursday. Npower said in a statement: "As we announced a couple of months ago, npower has been undertaking a major review of sites, operations and people across the UK. "We've been doing this to improve our customer service and keep our costs down, at a time of external pressures on customers' bills. As we've always said, we'll tell our people first and then inform the media," it added. Npower and the other big six firms such as SSE and Centrica insist that they have to raise domestic bills and trim their costs in a bid to counter the impact of rising wholesale prices and green levies for home insulation. Npower's parent RWE said earlier this month that 6,750 jobs would need to be cut across Europe as it tries to reduce a debt mountain of over £28bn, partly caused by the Berlin government's decision to phase out nuclear power stations." The key bit that jumps out at me in that piece in the Guardian was the cutting costs line. This is clearly not to cut costs for the customers and those who use Npower but to keep costs down for the business and to maintain profits and raise profit levels if possible. With Britain being the second biggest nation for outsourcing we will see in time if its allowed to happen a huge wave of outsourcing to other cheaper nations and to areas where the labour costs are cheaper. In an excellent piece on Open democracy Stuart Weir writes "The government has put a huge FOR SALE sign over the country’s public assets and services. According to the website, the bulletin board for “leaders in finance shared services”, the United Kingdom is the world’s largest out-sourcing market after the United States. The number of contracts in the UK has increased sharply by 47 per cent to 148 contracts a year since 2010. The annual contract value for this country jumped 16 per cent in 2012 to $3.75 billion! All this before the major sale drive about to take place in the NHS. The International Services Group (ISG) states that the UK accounted for 80 per cent of all contracting out across Europe, the Middle East and Africa, making our government alone among the major European economies in using out-sourcing as a key element in its response to austerity. Richard Vize, of Outsourcer Eye, says that the application of cuts is dominated by “short-term thinking”. The effects of all this activity on quality or cost is unclear and there is no reliable information on the impact of cuts or out-sourcing – though these effects are visible, for example, in local government, the NHS and government agencies such as the Inland Revenue. The government’s “short-term” thinking is of course, as Polly Toynbee warned recently, part of a determined and reckless long-term drive to reduce the public sector to a mere rump. Social security is gradually being outsourced to charities and food banks, while services and assets are increasingly handed out to private firms to operate at often extortionate prices (like the trains), described by George Monbiot as the 'toll booth economy'. The effects on ordinary citizens will be far-reaching and devastating, the more so for the vulnerable people whom the state has long acknowledged a responsibility to protect. The state is being fundamentally transformed before our eyes. This is a phase or a form of capitalism which is turning public service’s into money making enterprises and this will stop at nothing. From our energy sector to our schools and hospitals nothing is sacred when it comes to capital's drive for greater and grater profits. With thanks to open democracy link to article at

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