Alarm as firms get India call

HUNDREDS of thousands of jobs are at risk of being shunted to India and China because of a skills shortage looming over Middle Britain's business community.

David Frost, director-general of the British Chambers of Commerce, has warned that a dearth of skilled staff is threatening growth and jobs among mid-sized companies across the country.

The BCC represents 135,000 firms employing a total of 4m people. Many are local family-owned concerns - once the backbone of traditional industry but now striving to compete on a global stage.

Big financial services companies including Aviva, the Pru, Lloyds TSB and HSBC have already shipped thousands of low-skilled call centre jobs overseas. Half of all calls to National Rail Enquiries are to be handled from India under a £100m contract awarded yesterday.

But the BCC believes this is just the tip of an iceberg. Frost said: 'The emphasis is placed on the outsourcing of call centre jobs, but it is a lot deeper than that.

Some 40% of our member companies are suffering skills shortages in vocational areas. If the skills are not in Britain, then companies will go to India and China.'

Firms are performing well, he said, but their growth could be stifled by the failure of our education system to produce enough people with relevant qualifications.

'Too much attention has been paid in the debate about universities to the traditional academic degree. We need more graduates in areas such as engineering. We need skilled technicians. We need Government drive to attract people to vocational courses.

'Educational establishments in India and China are turning out high-quality individuals with the real skills that business needs.

'In manufacturing, it will not just be low-skilled metal-bashing jobs that go overseas, but highly-skilled ones as well. The worry is that research and development jobs will follow.'

Frost's warning that Britain is facing a skills shortage is echoed in India, where business leaders and politicians hope to reap the benefit.

A study commissioned by India's National Association of Software and Services Companies by business researchers Evalueserve Analysis found that the UK's ageing population and low birth rate will leave us short of 714,000 workers by 2010.

The report estimates that it will result in up to 300,000 jobs moving overseas with some of the remaining gap plugged by immigration.

The trend for 'offshoring' jobs to low-cost locations is afflicting other Western nations - including the US where a website called www.yourjobisgoingtoindia.com monitors the effect of globalisation on people's careers.

Frost fears that the public sector, which is ballooning as a result of Chancellor Gordon Brown's ambitious reforms, is luring talented people away from industry.

'The whole package in the public sector far outstrips that in the private sector in terms of pay, pensions and holidays,' Frost said. 'It is now out of kilter and firms are losing skilled staff.'

He said firms did not necessarily resent paying taxes to fund health service and education reforms, but they wanted results.

'Firms are having to compete globally and to become ever more efficient. They now want to see the same efficiency in the public sector,' he said.