Motoring organisation the AA recently decided against moving its call centre operations to India. Deputy Business Editor Kate Bowman takes a tour of the group's regional centre.

In August, the AA announced that it was implementing an £80m restructuring programme to reduce costs and improve efficiency.

More than 50 job cuts at its Newcastle insurance call centre followed, along with scores more at its Cardiff base.

Suspicion grew that the organisation was planning to move its operations abroad and that these were the first steps. Fears grew that sites in Oldbury and Cheadle, and its head office in Basingstoke, would be in the firing line next.

With costs in the UK rising and profit margins being squeezed in the car and home insurance industry, moving operations to one of the so-called low-cost economies, such as India, was an attractive option, says public relations manager Ian Crowder.

But despite the huge potential a move to India would have for cutting costs - the AA has estimated about £24m - Ian believes the AA made the right decision in staying in the UK.

He said: "The AA is a pillar of British society and a lot of our customers would find it difficult if we moved abroad. A lot of our road members have been with us for a long time and, from research we have done, there is a strong suggestion that we could lose customers by leaving."

"I think that with so many competitors offshoring, remaining in the UK may be a differentiating factor that works in our favour.

"This decision has been taken for the business, for the time being. Who knows what the future will bring and who will own the AA in three or five years time?"

But while this "never-say-never" outlook offers little in the way of long-term guarantees, bosses at the group's Newcastle office, in William Armstrong Drive, point to an investment of £12m in IT improvements as a strong indication of the company's intention to remain in the UK.

The investment will include the installation of computer systems and telephones throughout the site, which employs about 800 staff and deals with home and car insurance.

The AA is owned by two private equity firms following a £1.75bn takeover in October.

Contrary to the commonly-held belief that call centres are full of youngsters using the job as a stop-gap, Newcastle AA has a staff turnover of only 15 per cent - and some workers have been there for 25 years.

David Rollins, head of customer operations in Newcastle, says that while staff work in a very regulated environment, the company does not "clock their every move", as Press reports of call centre operations have suggested in the past.

He said: "We do check to ensure our staff are selling insurance in the proper way, and we do need them to log out when they go for a coffee break, but the reason for that is so calls are not channelled to their phone when they are away from the desk. In simple terms, we ask people to work to cover customer demands."

Systems delivery manager Lesley Williams, has worked for the AA for 18 years. She said: "I have seen a lot of changes and a lot of challenges over the years, but the company is better for them.

"I have seen the move from paperwork to computerised systems and the latest investment is only going to make the whole system even more efficient.

"The AA has grown and diversified and, with that, the staff have adjusted and it has always been a lively, happy call centre. Staff can take anything up to 50 or 60 calls a day, so they have to enjoy being here at the same time."

As well as investment in IT, David says the company is expecting to refurbish the centre soon, with new carpets and blinds. Any remaining doubts about working conditions are dispelled by the canteen area and chill-out room, complete with pool table.