The Public and Commercial Services (PCS) union has warned that UK jobs could be offshored following an announcement that back office civil service work is to be outsourced to Steria.

According to the union, the Cabinet Office is outsourcing a range of shared services in several government departments, including IT, HR and finance, to French IT company Steria.

A spokesperson for PCS said: "All our indications so far is that it does cover [IT] staff, or [the] IT function. If it was offshored, then the function but not the staff would transfer."

In a letter to civil service staff on Monday 9 September, Stephen Kelly, chief operating officer of UK Government and senior responsible officer for the Next Generation Shared Services (NGSS) Programme, said that Steria UK had been chosen as the preferred bidder to be the private sector partner of the ISSC2 joint venture.

ISSC2 (Independent Shared Service 2) is part of the Civil Service Reform Plan, which aims to consolidate and deliver government back office functions more efficiently.

The ISSC2 initiative is comprised of a number of existing shared service centres, the largest of which is operated by the Department for Work and Pensions (DWP). ISSC2 will deliver payroll, HR, finance and procurement services to DWP's existing customers, with more government departments joining in due course.

PCS has asked for government to reassure staff that their work will not be sent overseas.

"We have grave concerns, not only about the security of people's jobs, but also about the threat that work will go overseas," said PCS general secretary Mark Serwotka.

"We have asked the Cabinet Office to confirm there will be no offshoring and it is very worrying that it appears unwilling to do this."

New organisation created

Following the deal with Steria, the new organisation will be called Shared Services Connected Limited (SSC Ltd). The UK government will retain a 25 percent stake in SSCL, while Steria will hold the remaining 75 percent stake.

"Steria are experts in their field and part of a larger professional organisation that will offer SSCL staff positive development opportunities. The project will continue to work with our representatives and Steria to conclude negotiations and complete legalities, and consultation with trade unions will also commence," Kelly wrote.

However, PCS also raised concerns over the security of crucial data, including payroll and procurement, particularly if jobs are offshored.

It understood that a proportion of offshoring formed part of the bidding process, and feared that it may form part of the successful bid by Steria.

According to Georgina O'Toole, analyst at TechMarketView, if the government awards the contract to Steria, it will initially be worth £500 million over 10 years, and up to £2 billion as more departments and agencies are signed up.

"It would be a huge boost to Steria's central government business, which is currently worth about £150 million per year," said O'Toole.

"But we suspect Steria is refraining from popping the champagne corks just yet. The contract is not due to be signed until just before year end. And it looks like the biggest hurdle may be pinning down the details around the off-shoring of some services."

A Cabinet Office spokesperson said: "The civil service is moving to be faster, smaller and more unified and sharing services is a central part of this.

"The Next Generation Shared Services Strategy sets out a new model to share HR, procurement, finance and payroll functions with five centres instead of the current eight in order to deliver more efficient and cost-effective services."

The first Independent Shared Services Centre (ISSC1) contract was awarded to Arvato, with Unit 4, in March this year.