Councils slam US ban on outsourcing

13 March 2003
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13 March 2003 | Mark Whitehead

Local government purchasers have branded a US move to ban outsourcing services to low-cost countries abroad as protectionist and anti-competitive.

New Jersey is close to enacting laws while Michigan is among several other states said to be considering similar action aimed at protecting domestic jobs and shoring up the local economy.

It is aimed mainly at countries including India, where several western companies have outsourced major functions such as call centres or IT work.

The American move seems likely to be coolly received among purchasers in Europe where legislation acts against protectionist practices.

Dave Wheller, head of procurement and direct services at Essex County Council, told SM: "In the UK, we want to make sure that we trade on a fair basis.

"If outsourcing abroad delivers the greatest benefit to the community, we should be free to go for it, as we are under European law."

Local councils spend about £25 billion a year on bought-in goods and services, though this is not thought to involve any direct outsourcing to companies based outside Europe.

Denis Cooper of law firm Eversheds' local government team, said: "The whole point of EU procurement regulations is to avoid restraint of competition and ensure an open market."


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