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The Lloyds TSB union thinks the bank should stop offshoring functions – in return for government support over the HBOS merger. However, industry experts predict that not only is this unlikely, but also that more IT roles are likely to be shipped out going forward.

HBOS had planned to offshore 250 permanent IT roles to India, plus 200 contractor positions, by the end of the year. This is in addition to the 3,000 banking jobs already offshored by Lloyds TSB.

Steve Tatlow, assistant general secretary, Lloyds TSB Group Union, says: “Rather than making the jobs of existing staff redundant, the Lloyds TSB board should put an immediate halt to transferring jobs to India and return jobs to the UK for those staff that it currently employs itself.”

HBOS employs around 2,000 UK-based IT workers itself, though. It had already axed 100 of these before the merger, and plans to reduce total IT workforce by 5%. With potential system overlaps between the two banks, the signs look pretty ominous, and calls to prevent offshoring smack of wishful thinking.

Nigel Roxburgh, research director at the National Outsourcing Association, says that offshoring plans are likely to be low on the agenda for any banks going through a merger, and the current climate means it’s only going to increase anyway.

“Organisations have claimed for a number of years that offshoring is about improving quality of service and seeking innovation in their agreements. But ultimately it's about cost,” he says.

Cost is such an issue at the moment that the banks are even trying to knock down the prices of the outsourcing companies, reckons Phil Morris, managing director for the EU and Asia for outsourcing advisors EquaTerra.

"I can see some pretty aggressive stances being taken by financial institutions to ensure they get a better deal going forward,” he says.

Morris adds: “Outsourcing is counter-cyclical, as soon as the economy takes a downturn then outsourcing goes up.”