London: Apart from multi-national financial institutions, British Government departments now plan to outsource in India as part of their cost-cutting and efficiency drive.

"Departments should seek to match the savings achieved by private-sector firms through so-called off-shoring," Sir Peter Gershon, former chief executive of the Office of Government Commerce, recommended in his final confidential report for the Treasury last month, 'The Sunday Times' reported today (May 16, 2004).

Financial services firms in particular have shifted back-office functions and call-centre work to India, in some cases achieving large savings.

Chancellor Gordon Brown is known to be pushing for big savings during the comprehensive spending review, which will be finalised in July, the report said.

With the exceptions of health and education, departments have been warned to expect only small real increases in their budgets.

Brown said at the time of the budget that he would be seeking to cut about 40,000 civil service posts - 30,000 from the Department for Work and Pensions and more than 10,000 from the merger of Inland Revenue and Customs and Excise.

David Verney, former chairman of mobile-phone group MMO2, who is heading the merged Revenue and Customs Department, hinted that shifting call centres overseas would not be ruled out.