British prime minister David Cameron said all outsourcing contracts signed with the previous government will be reviewed as the country battles a huge budget deficit that stands at 11% of national income, the highest among G20 countries. He, however, was quick to assure that his government will remain open to sending work to India in the future.
On his third visit to India and his first as the PM, Cameron said his government has to look at every contract in terms of cost and value. In his address at Infosys Technologies on Wednesday, he said, ?We have a huge budget deficit. One of the biggest tasks of my government is to make sure we can live within our means again. We are reviewing contracts. We are looking at what we pay for the services that we receive. Just like any business.?
Britain is one of the most open, globalised economies that is prepared to look at outsourcing and ownership right across the world, he said. ?If you look at other European economies, I think you will be hard pressed to find another economy that is happy to welcome so many overseas companies to come and invest. That applies to government outsourcing,? he told FE.
A recent report by a research firm had warned that 35 major UK government IT outsourcing contracts risked renegotiation under the Conservative-Liberal Democrat coalition headed by Cameron. This would include a ?600 million pension administration contract inked with India’s largest IT services exporter TCS in March. The coalition government has capped ICT procurement at ?100-million, for every contract.
?We take over at a time when costs are running high and revenues are running low; you are going to get the costs down and revenues up. That’s why we are cutting costs and we are here in India promoting business and investments,? said Cameron, 43, the youngest British PM in almost 200 years. The $60 billion Indian IT services industry banks heavily on US and Europe for its business.