Industry news

One in six firms has moved re-shore work back to the UK due to savings in the face of rising costs in traditional offshoring destinations.

In a report entitled ‘Backing Britain – a manufacturing base for the future’ found that manufacturing companies were increasing sourcing back to the UK, due to competitive logistics costs and improved quality.

The report compiled by EEF and law firm Squire Sanders, identified that reshoring had increased over the last three years, with only one in seven firms bringing work back to the UK in 2009. The report found that 40 per cent of companies that did reshore services experienced increased turnover, while 60 per cent saw increased profit.

The report concluded that: “It is now key that government policy supports the most competitive business environment possible so that we continue to see more high value, innovative manufacturers invest in and sell from the UK.”

The G-Cloud director Tony Singleton has revealed that nearly 90 per cent of local authorities have not heard of the G-Cloud.

The G-Cloud director posted on his blog that despite the benefits of the procurement framework, “research carried out by the 6 Degree Group suggests that nearly 90 percent of local authorities have not heard of G-Cloud.”

The director detailed that the G-Cloud needed to be publicised more with the benefits communicated to local authority in order to drive uptake.

Mr Singleton said that the publication of clear guides designed to help buyers to better understand the procurement framework would help authorities understand how the cloud could reduce procurement times and improve competitive pricing.

Suppliers call for G-Cloud changes

Oracle opens new datacentre to support UK G-Cloud

Liverpool Council has moved to end its multi-service joint venture known as Liverpool Direct Ltd (LDL), with BT after the telecommunications giant was unable to agree to price reductions.

The council in order to meet public sector savings targets after reduced budgets has asked BT to further reduced service prices, but will now move to take complete ownership of the joint venture, bringing services back in house, after BT failed to agree to the cost cuts.

LDL had provided a range of services including payroll, HR, IT, and revenue services, with the contract planned to cover up services until 2017.

The mayor Joe Anderson said: ”Over the last three years as much as possible has been done to protect services to the vulnerable from the budget cuts. However going forward this cannot continue.”

He acknowledged that despite price cuts by BT, these changes would not be enough: "Unfortunately BT feels unable to commit to any further price reduction within the contract as they need to sustain their own financial position. Moreover, the City Council is now well placed, as a result of the long collaboration with BT and the learning gained from the Partnership, to continue to drive forward business transformation and run the services with consequent cost savings to the city."

Wolverhampton City Council looks to outsource services in order to save millions

Merseyside councils in governance review to create a “Combined Authority”

The Driver and Vehicle Licensing Agency (DVLA) have been told to increase the speed and size of its digital transformation following a review from the Department of Transport.

The report identified that many DVLA services are still paper based, and that digital transformation is a prerequisite for service improvement and cost savings.

The report also cautioned that the DVLA transformation programme had an element of risk due to a lack of in-house skills and experience, the complexity of the digital upgrade and the need for a new IT infrastructure while maintain services throughout the transformation process.

The report said that the digital programme is expected to be operational by September 2015, however service will be delivered incrementally, delivering short-term, large scale savings.

Digital strategy at heart of public savings in 2014

Move to digital-by-default for legal aid delayed

The stock prices of UK outsourcing company Serco Group rose by the highest amount in a decade, with a 13 per cent increase after the appointment of a new CEO.

Serco shares climbed to 463.50 pence with the company’s market value now at £2.23 billion.

Rupert Soames was appointed as the new CEO, and is set to take over from incumbent CEO Ed Casey on June 1st according to a statement from the outsourcing service provider.

Mr Soames has been appointed on the back success in driving growth in his past roles, and his posting comes as part of Serco’s attempts to grow following put negative stories in 2013, including a 68.5 million recharge to the UK government following service overcharging.

G4S and Serco criticised by government watchdog

Serco takes a 17 million pounds charge after three UK loss-making contracts

Capita has said that it expects to benefit from a buoyant outsourcing market as the public and private sector turn to outsourced services to create savings.

While other large outsourcing companies such as G4S and Serco have been hit heavily by fallout from a series of scandals, including overcharging and failure to meet service targets, Capita has managed to emerge relatively untouched.

Capita also expects that contrary to past expectations, the pre-election period will continue to see strong outsourcing market performance due to the need for savings, with the hope of meeting budget goals driving the markets growth.

Deputy chief executive, Andy Parker, said: “There’s been £1bn of decisions since November, and we have won £600m of that. The G4S-Serco deals have obviously damaged sentiment for the sector but I don’t think it’s affected that many decisions.”

Capita post 14% profit rise

Capita awarded £110 million NHS Scotland contract

House-prices have risen again according to the latest figures, with job market growth and strong performances from manufacturing, fuelling expectations of a sooner than expected interest rate rise from the Bank of England.

House prices have risen to the highest level since 2007 while job creation entered into a 22-month high. Manufacturing has also performed strongly, growing despite poor weather and 17 inches of rain over February.

The Bank of England policy makers are due to meet this week, with analyst predicting that interest rates will still remain at 0.5 per cent.

Bank of England steers away from interest raise

Bank of England reports improving economic forecast

Capita have posted a 14 per cent annual profit rise after a year of strong sales.

Outsourcing giant Capita recorded £588 million in revenue from new contracts in 2014 having succeeded in avoiding the negative stories that have affected G4S and Serco.

The company posted an annual pre-tax profit rise of 14 per cent at 475 million, with 8 per cent revenue growth for 2013, meeting predictions for the year.

The markets saw a five per cent rise after the announcement from the company as shareholders capitalised on strong results.

Capita CEO Paul Pindar said: "2013 was a year of strong sales, operational and financial performance. We accelerated our organic growth, sustained good cash generation and are reporting record underlying profits for the 25th successive year.” He added that the published results provide “a strong platform for further growth in 2014”.

BT has announced that it will create more than 1,000 new positions for apprenticeships and graduates.

The new positions will be focused in areas of IT, research and engineering, with the telecoms giant looking for 300 graduates from science, technology and business disciplines, and 730 apprentices to work in similar areas as well as logistics, design and engineering.

BT has also created a digital media technology apprenticeship, designed to teach young people skills in web design and development, digital distribution and services.

Vince Cable, Secretary of State for Business, Innovation and Skills, said: “I would encourage all employers to follow the lead of firms like BT and recognise the value and dynamism apprentices can offer businesses of all sizes”.

Gavin Patterson, chief executive of BT, said: “with almost a million young people across the UK struggling to find work. Every company needs to play its part in ensuring that Britain’s future workforce isn’t impaired by long-term unemployment.”

Union defends BT against monopoly claims

BT Sues Google Over U.S. Patent Infringement

Despite poor industry performance over past years, the UK’s automotive industry is now seeing signs of increased investment.

Research from KPMG has revealed new unprecedented investment in the industry, with expectations that suppliers will be sourcing 40 per cent of parts from the UK by 2017.

The car production in the UK is expected to rise to more than 2 million by 2017 as new models and investments drive future growth.

Fiat looks to Chrysler acquisition

Jaguar Land Rover looks to develop procurement capability