UK's Health Service to outsource to India

Thursday, 25 November 2004, 08:00 Hrs
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LONDON: Britain's National Health Service (NHS) is expected to move around 400 jobs to India to save costs as part of a part-privatisation of its back-office accounting and purchasing division.

IT services firm Xansa is reported to be taking a 50 percent stake in a government agency that does purchasing and accounting on behalf of the NHS.

The firm has guaranteed to cut costs by 20 percent, potentially saving the NHS 220 million pounds over 10 years.

The deal will initially mean the transfer of 230 NHS staff to the private firm. They are based in Bristol and Leeds and are employed by the state-owned group Shared Financial Service Centres, which will become a private company in April under the terms of the deal.

The staff already conducts back-office work such as invoice payment and VAT (value added tax) returns for 36 of 663 NHS organisations and Department of Health agencies.

Xansa plans to increase the number of NHS divisions it services to more than 300, which should bring in revenues of around 500 million pounds in the next 10 years.

A Xansa spokesman said that as the firm increases its staff numbers, 350-400 employees, a third of the staff on the project, will be based in India.

"We understand that any extra capacity created as more NHS trusts come on board will use resources in India," said a Department of Health spokesman.

"We expect that will save 46 million pounds over 10 years."

He said the staff in the NHS trusts who had previously done the work were likely to be redeployed rather than made redundant.

Xansa also hopes to increase the scope of the contract to include payroll and human resources, which could make the contract worth up to 1 billion pounds.

A spokesman said it is "conceivable" that more staff would be employed offshore in this scenario. Apart from moving certain jobs to India, the venture aims to save money using the larger purchasing power of a centralised service and by using "private sector expertise."

The move is part of government policy to save money in the bureaucracy of the NHS to fund more front-line staff such as doctors and nurses.

"The joint venture will generate significant cost savings - enough to pay the annual salaries of over 3,000 generaL practitioners or 12,000 nurses," said health minister John Hutton in a statement.

Source: IANS
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