Powergen brings call centres back to UK

Powergen brings call centres back to UK

Powergen is closing its Indian call centres and re-opening five in Britain after admitting that outsourcing had affected customer satisfaction.

The company, which is part of German group E.ON, admitted on Thursday that its use of Indian call centres had in effect had a negative impact on its customer services. The announcement was immediately seized upon by union leaders as evidence that offshoring does not work.

From Friday, the company said, all calls made by customers would be answered in the UK rather than by call centres in India. It 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.

For the past five years the company, which has six million domestic customers, has used workers in the subcontinent to answer about 10% of incoming calls, predominately queries or complaints. Over the same period it saw the number of complaints reach record levels

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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 said on Thursday that the decision was part of a radical reorganisation of its customer-facing operation that would also focus on improving staff training. 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.

Powergen is not the first company to return call-centre work from abroad. Last year Abbey announced it was bringing call-centre work back to the UK from Bangalore after a number of complaints from customers.

Guardian Unlimited © Guardian Newspapers Limited 2006