Industry news

The Justice Secretary Chris Grayling has been urged to reduce the speed of the probation services timetable to outsource services.

The timetable to outsource 70 per cent of the probation service’s workload by a deadline of April 2014 has been criticised by leading figures in the probation service.

The plans will see the transfer of 225,000 low and medium risk offenders to ‘community rehabilitation companies’.

Mr Grayling has received three letters warning that performance would be risked if the timetable was enforced.

Both Leicestershire and Warwickshire probation trusts have called on Grayling to delay the timetable by at least six months.

Robin Verso, the Warwickshire probation trust chairman, said: “performance is bound to be damaged” , while Jane Wilson, chair of the Leicestershire and Rutland probation trust, said the deadline was unrealistic and posed “"serious implications for service delivery”. Gillian Wilmott, the chair of the Derbyshire probation trust,commented that the plans had the potential to lead to "more systemic risks”.

The outsourcing project , with contracts worth a total of £450 million, is based on a payment-by-results payment

schedule

MoJ tenders for £108 million ITO contract as part of future procurement strategy

SME specialist secures role in major MoJ tagging contract

Outsourcing firms working with the public sector should take note of the Government’s new Fair Deal. Outsourcing firms currently contract out many public sector employees from the public sector pension and provide an equivalent arrangement, but they will soon be able to offer them the option of staying within their public sector pension schemes, rather than having to place them within their own programme. They will also be able to transfer existing staff back into public sector pension schemes at the end of existing public sector contracts. This will affect more than 500,000 workers within teaching, the NHS and central government.

This reform will be welcome news to many in the outsourcing industry, who have seen requirements around pension provisions as problematic in the past. The defined benefit schemes that contractors are currently required to provide to transferred staff are costly, often carrying unwelcome complexity and financial risks that can act as quite a deterrent to those looking at tendering for contracts. Enabling access to public sector pension schemes however can remove these barriers, opening the door for new contractors to bid for work.

The effect of this could be a liberalisation of the public sector contracting market. SMEs, charities and others that may not quite have had the pensions capabilities to take on much public work in the past should now find the process easier. This could theoretically lead to lower costs and more innovation for public services. It also makes pension provision easier for both contractors and members to understand.

The new Fair Deal will also save time and effort. Contractors currently spend a considerable amount of time addressing pensions in the tendering stage of a contract, but there may possibly be an option to enter into a standard participation agreement in the relevant public sector pension scheme for new contracts. This would standardise the process for all bidders, making life both easier and fairer.

Awarding bodies will also have one less thing to worry about as the pension costs will arguably be removed from the equation when bid prices are reviewed. Bidders’ pension management expertise will no longer be a factor, allowing the decision to be based on the quality of the service and the ability of the bidder to provide it. This is surely fairer for all involved.

There are however some questions that contractors will need answered and they should be aware of the finer details of the new Fair Deal before taking advantage of it. For example, ‘risky’ employers may be levied with an additional 2% of payroll (in respect of the transferred staff who are covered by the public sector scheme, rather than their entire workforce) to protect the public sector. Being deemed risky may have implications for a contractor’s wider business, so a balance will need to be struck on how this is decided. Contractors may also remain on the hook for additional costs relating to pension schemes at the end of their contract, for example if they default on payments during the contract term or grant excessive pay increases that feed into members’ pension amounts.

Whilst new contracts and those covered by the old Fair Deal will be subject to the new rules in the future, outsourcers with contracts sourced prior to the old Fair Deal will have questions that need answering. There is no mention of contractors in this position and clarification will be needed over whether these staff will be eligible to return to the public sector scheme on a contract renewal.

These changes are likely to really be felt across the public sector. They should inject a shot of competition into the outsourcing market, giving SMEs, charities and others a fair run at contracts where they might have previously not been in the race. New lower costs may also tempt some outsourcers to look at moving into other public services which they have dismissed as uneconomical in the past.

Procserve wins Department for Work and Pensions award for innovation

HML have invested further in Ireland with the creation of a new operational base, as the mortgage administration company focuses on expanding local infrastructure.

The new site is situated in Clonskeagh, Dublin, with Bernard O’Sullivan, the country head in Ireland, managing the site.

The expansion in the Republic comes after the opening of new offices in Dublin in 2012, as the company seeks to take advantage of new business opportunities.

Andrew Jones, chief executive officer of HML, said: “I am delighted to announce that HML has expanded its presence in Dublin with our new operational base. This reinforces our commitment to the Republic of Ireland and stands HML in good stead for further progress and growth.

HML announces deal with Arrow Global

The Ministry of Justice has placed tender for a contract valued at £108 million, for application development, management and support, which will support the ministries ICT Future IT Sourcing programme (FITS) framework.

The FITS framework is designed to oversee the renewal of legacy contracts that are coming up to the end of their terms over the next few years, modernising contracts to deliver services across whole organisations rather than being limited to individual business units.

The transformation of ICT contracts through the FITS framework is expected to save around £100 million over the next three to five years.

The three year contract will be: “responsible for a key component of the FITS services, namely second and third-level application maintenance and support”, according to the contract speciation.

MoJ out to tender for EUCS

MoJ scraps procurement programme

The National Outsourcing Association Awards (NOAAs) took place last night at the Park Plaza Riverbank Hotel in London. Celebrating a decade in existence, the NOAAs is designed to recognise best practice in outsourcing projects, and reward end-users, suppliers, advisors and destinations.

National Outsourcing Association Director, Kerry Hallard said:

"2013 is a monumental year for the NOAAs, as it was our 10th Anniversary last night, and yet again we saw a growing number of submissions - all of outstanding quality. The shortlist truly represents the best of the best in outsourcing, and I am extremely proud to see that so many organisations clearly value the positive association of participation. We'd like to congratulate all the winners, and thank all those that took part. Thanks also go to our sponsors; arvato, TCS, Xchanging, Infosys and Sitel, for supporting the event. Without them it would not be possible. "

The winners are:

International Contract of the Year

eClerx Services Ltd. - Global Reference Data Operations

Offshoring Project of the Year

Xchanging

Start-up/SME of the Year

New Galexy

Offshoring Destination of the Year

Sri Lanka

Telecommunications, Utilities and High-Tech Outsourcing Project of the Year

Infosys and BT - Unlocking field force potential project

Public Sector Outsourcing Project of the Year

HMRC

Financial Services Outsourcing Project of the Year

RESPONSE - Hiscox

Best Contribution to the Reputation of Outsourcing

arvato UK & Ireland

Award for Corporate Social Responsibility

SPi Global

BPO Contract of the Year

Firstsource - BSkyB

ITO Project of the Year

Legal & General - TCS

Award for Innovation in Outsourcing

Capita Life & Pensions

Shared Service Centre of the Year

Liberata - CapacityGRID

Outsourcing Advisory of the Year

Source

Outsourcing Contact Centre Provider of the Year

Mindpearl

Outsourcing Service Provider of the Year

Firstsource

Outsourcing End User of the Year

HMRC

Outsourcing Works - Award for Delivering Business Value

Liberata - CapacityGRID

People's Choice Award - Contribution to Outsourcing

End User winner = Graham McKane, Previously VirginMedia

Supplier/support winner = William Pattison, Mindpearl

The UK Home Office has awarded a contract with a total value of £621 million to two companies to manage visa applications globally.

Teleperformance received a £300 million contract while VF Worldwide Holdings received a £321 million, with both contracts lasting for five years with options to extend.

Services covered by the contract include application and biometric tools, document registration, interview facilities, and courier services.

Both companies will be managing a series of sub-contractors who will operate it different geographical locations.

UK e-borders scheme criticised

Call for U.S outsourcing visa rules to be cleared up

Contractors have blamed the US Department of Health and Human Services for the reveal of multiple errors and the poor performance of the HealthCare.gov website.

Contractors working on the HealthCare.gov website have criticised the rollout of the website prior to effective testing, citing a failure to properly test the services provided by the site.

Despite two weeks of testing, the site launched to serve errors with long load times.

Cheryl Campbell, a senior vice president for one of the main contractors CGI Federal, said they “would have liked to have months" to test the project, with the pressure to launch leading to the project moving forward without effective testing.

EquaTerra sees increased healthcare outsourcing worldwide

BT has signed a multi-million contract with Oracle which will see 88,000 HR staff of the telecoms giant moved to a cloud hosted platform as part of a transformation programme.

HR staff will be transferred on to the Oracle Human Capital Management (HCM) system, which will cover HR staff based internationally that provide services including management, analytics, recruiting, and other end-to-end services.

The new service provides an easier user interface, improved administration and standardises tool sets across a global employee base.

“Oracle’s comprehensive HCM portfolio will help enable BT to increase productivity, accelerate business performance and empower its people,” said Oracle president Mark Hurd.

BT completes Visa communication upgrade

The Bank of England’s Monetary Policy Committee has said that the UK is facing improving prospects with improving business and consumer confidence.

While the committee said that it was, “too soon to draw a firm conclusion from recent labour market outturns about the extent to which productivity would increase", minutes from the meeting revealed optimism surrounding the UK’s economic prospects, with a fail in the unemployment rate to 7.7 percent, and expectations of overshooting a unemployment target of 7 per cent within three, years now deemed as probable.

The committee decided that interest rates should remain static at 0.5 per cent with a unanimous vote upholding the current rate.

Bank of England Announce £100bn Stimulus Package

The latest Information Services Group (ISG) outsourcing index posted significant market growth with an 89 per cent rise in the annual contract value compared to the last quarter.

The latest figures posted in the index recorded record numbers of outsourcing deals in the EMEA, with nine out of ten outsourcing contracts in the world worth over €80 million occurring in the region, confirming it as the world’s largest outsourcing market.

The index recorded a total of 125 ITO contracts taken out in the Q3 alone, overtaking the previous EMEA record.

On a regional level, the United Kingdom showed strong third-quarter results, recording €680 million in annual contract value, up 35 percent over the prior quarter. However, Germany led the region’s growth, posting €810 million in annual contract value and surpassing the UK for the first time.

“EMEA achieved the highest third-quarter results on record, a strong rebound from the weakness observed in the first half of the year,” said John Keppel, Partner & President, ISG North Europe. “While the improvements we are seeing are in comparison to weak performances in the first half, we believe the high level of contracting activity speaks volumes about the underlying strength of the current market.”

Bank of England reports improving economic forecast

Wipro announce strong Q2 results with 28% net growth