Government agencies DWP, Defra, and Environment Agency to delegate tasks to IT services provider Steria
England's administration is all set to offload routine tasks from the Department for Work and Pensions (DWP), the Department of the Environment, Food and Rural Affairs (Defra), and the Environment Agency to French IT services company Steria.
Under the agreement, a shared services organization will be formed, with 75% ownership by Steria and the remaining 25% by the government.
Check out: Department of Transport outsources back office to arvato
Steria is overjoyed to be the preferred bidder selected by the Cabinet Office for this Independent Shared Services Connect Joint Venture, the firm reported today. However, they've maintained silence on the deal due to ongoing negotiations and confidential commercial reasons.
This marks the second such deal the government has signed. Back in March, the Department of Transport outsourced its back-office functions to German BPO company arvato.
Yesterday, Financial Times reported that the Cabinet Office briefed civil servants about this plan last week. Approximately 1,000 roles could potentially move to Steria's offshore delivery centers in India.
Take a peek: Financial Times reports the deal is estimated to be worth £500 million initially, but could increase as more departments utilize the shared services center. The Cabinet Office claims the deal promises a substantial savings of £600 million per year for taxpayers.
Check out: DWP criticized for offshore work on Universal Credit
Last week, the Public and Commercial Services Union expressed deep worries about this arrangement. "We have serious concerns, not just about the future of our members' jobs, but also about the risk of work moving overseas," the union said.
Sopra Steria is a European frontrunner in digital transformation, offering services in IT, consulting, and business process outsourcing. The company has been a top provider in the Defence Software & IT Services market in the UK [1]. Outsourcing typically transfers roles from the public sector to a private firm, which might lead to job losses in the public sector but potentially create new positions within the private sector managing the outsourced services. The precise savings would depend on the specifics of the outsourcing arrangement, such as the scope of services outsourced and the pricing model agreed upon.
[1] Reference: https://www.topcisreports.com/reports/2883-defence-software-it-services-market-in-the-uk-growing-through-2028
- The agreement with Steria could bring significant changes to the finance sector, as the shared services organization is expected to oversee the management of funds for multiple departments, including the Department for Work and Pensions.
- As the administration outsources more tasks to private companies like Steria, there might be shifts in the industry landscape, particularly in the finance sector, as these companies take on the responsibility of managing public funds and resources.
