Birmingham City council has named Capita as preferred
supplier for a 10-year £420m-plus joint venture.
Capita beat IBM in the final round of the tendering process. The
deal includes seconding 450 council staff to a joint venture
organisation to complete the IT work.
The council says it is aiming to save £1bn as a result of a
projected 15% increase in productivity through the partnership.
Capita has promised to create hundreds of new jobs in the city
as a result of the contract.
While the council has calculated a basic £420m-plus spend on IT
services over 10 years, it is expected that this figure will rise
as IT plays a growing role in the business transformation of the
council.
Capita will start work on the contract next April. Negotiations
with trade unions at the council are on-going.
The council hopes to avoid the type of industrial dispute which
took place at Swansea council last year, as a result of a big
outsourcing deal with Capgemini.
The joint venture company has provisionally been called Service
Birmingham. The deal has to be ratified by the council’s cabinet
later this month.
Meanwhile, North Lanarkshire council has signed a four-year £5m
outsourcing contract with Steria. The deal covers network,
telecoms, desktop and server management, and is designed to deliver
“guaranteed savings” to the council.
Winchester City Council is also planning to spend £2.5m on a
five-year outsourcing contract with Digica for desktop, server,
infrastructure and applications support.