Birmingham City Council has selected Capita as the
preferred bidder for a major IT partnership deal that it expects
will cut costs by £1bn over the next 10 years.
The local authority will take a 35% stake in the joint venture
company that will provide all of the council's IT services - a
contract that is worth £420m over 10 years.
The company will also be the first-choice supplier when the
council embarks on a series of business transformation projects
that it expects will save £1bn.
Birmingham has an annual budget of £1.45bn. If the partnership
achieves its anticipated savings, it will deliver all the cost
reductions the council is obliged to meet under the government's
Gershon efficiency review.
Glyn Evans, the council's director of business solutions and IT,
said the starting point for the business transformation projects is
whether they can be delivered via the joint venture.
Three business transformation projects have already been
identified. The first is to transform Birmingham's procurement
function. The second is to enable more staff to take advantage of
flexible working so the council can reduce its office space. The
third is to increase the amount of time social workers spend
delivering front-line care.
IT systems supplied by the joint venture company will underpin
all three projects.
The council has already started work on a business
transformation project in its HR department. For an investment of
£900,000, Evans estimates the department's running costs will be
reduced by £3m a year.
Birmingham has managed its staff relations carefully during the
preparations for the joint venture. About 450 employees will be
seconded from the council's IT department to the new company. The
council will keep 25 people to manage the contract with Capita.
Birmingham Council got IT staff involved in the joint venture by
having staff representatives at every meeting with Capita.
Capita chief executive Paul Pindar said, "We have committed to
deliver several hundred new IT jobs into the Birmingham area over
the course of the deal."
Public sector outsourcing deals
North Lanarkshire Council has signed a four-year, £5m contract
with Steria to provide IT support and infrastructure management
services. Steria will be responsible for managing three council
datacentres as well as providing network, telecoms and desktop
services in a deal the supplier said offered "guaranteed"
savings.
Winchester City Council is planning to spend £2.5m on a
five-year outsourcing contract with Digica for desktop, server,
infrastructure and applications support.