Utilities provider Powergen is to shut down its Indian call centres and re-open five centres in the UK. Paula John reports

Powergen is to close its Indian call centres after it admitted that its outsourcing strategy has impaired the standard of its customer service and drastically reduced the level of satisfaction reported by customers as a result.
 
UK union leaders immediately pounced on the announcement as proof-positive that offshoring does not work.
 
From today all customer calls will be answered domestically, rather than  by call centres in India.
 
Powergen plans to expand its centres in Bedford, Bolton, Leicester, Nottingham and Rayleigh in Essex, and aims to recruit and train 980 new staff by the end of the year.
 
The company, which has six million customers in the UK, has used workers in India to answer about 10% of incoming calls, predominately queries or complaints, for the past five year. Over the same period it saw the number of complaints reach record levels
 
Nick Horler, Powergen’s managing director, said: “Offshore call centres may have their place for certain industries. However, we believe that we can best achieve industry-leading customer service by operating solely in the UK.
 
“When customers contact us they need to be confident that their query will be fully resolved quickly. Although the cost of overseas outsourcing can be low, we’re simply not prepared to achieve savings at the risk or expense of customer satisfaction,” he said.
 
Powergen claims the decision to repatriate the service is part of a radical reorganisation of its customer-facing operation. It said some calls to customers and letter writing would continue to be made from India until the end of the year. It declined to say how much the move would cost.

“This change builds on the vast improvements that we’ve already made to our customer service – improvements highlighted in the latest Energywatch tables, which show that we’re improving faster than any other supplier,” said Mr Horler.
A spokeswoman for the consumer body Energywatch confirmed that last autumn it was receiving complaints about Powergen at a rate “twice the industry average”.

“In 2002 the company took over TXU Energy and it had serious problems merging the two databases,” she said. “Customers with billing problems have been phoning the company, and when those problems weren’t resolved properly they complained to us.”

Amicus’s national secretary, David Fleming, who has been at the forefront of the campaign against offshoring, welcomed the Powergen announcement.

“It is becoming increasingly clear that the business case for offshoring is being eroded by the day. There is a growing crisis in the Indian call centre and back-office industry. Labour costs are rising, turnover is spinning out of control and middle management are ill equipped to deal with the challenges of managing offshore services.
 
“We will see more and more companies looking back towards the UK as they realise the high-skilled, low-cost spin sold to them by consultants was exactly that: spin,” he said.