Bradford City Council last month signed an outsourcing deal that could redefine the parameters of public and private sector IT outsourcing.
IBM in partnership with Serco Solutions was selected to deliver a 10-year business transformation programme with a total contract value of 158m.
The innovative part of the deal is that it allows council IT staff to choose whether to move to the outsourcing partner or remain employed by the council.
This deal follows a settlement at the Bank of Ireland in September 2003, which gave IT workers transferring to outsourcing supplier Hewlett-Packard a five-year job security guarantee and goodwill payments worth a minimum 3,500.
"The Bradford deal is not just a benchmark for public sector outsourcing, but for all outsourcing deals," said Rory Murphy, director HR sourcing at outsourcing consultancy Morgan Chambers.
Under the contract, IBM will design and manage the transformation of selected council business management and process systems and deliver improved front-line customer services. Projects will include new systems and processes for finance, HR, payroll, procurement, revenue, benefits and the customer contact centre, supported by extensive change management and training expertise.
Serco Solutions, formerly ITNet, will manage key council IT services, including helpdesk support, network management, desktop services, IT asset management, server management and voice systems.
Just 10 days before the deal was signed the situation looked grim. After a year of negotiating with IBM as the preferred bidder, the council was faced with a vote in favour of strike action from IT staff who were members of public service union Unison. At the time, Unison said there were 40 planned redundancies in the IT department.
After frantic last-minute negotiations, the council, suppliers and Unison struck a deal. It will allow staff to either transfer to Serco under Tupe (Transfer of Undertakings Protection of Employment) regulations or alternatively, remain employed by the council with the choice to be seconded to Serco. Staff will also have the right to transfer to Serco in the future if they wish.
The employment model guarantees that no member of IT staff will be made redundant but instead will be retrained and re-skilled for employment elsewhere within the council.
Under the deal negotiated by Unison, all the responsibility for grievance and disciplinary, capability and attendance, restructuring, regrading and recruitment will remain with the council, not Serco.
The deal breaks the mould in IT partnering because it does not force employees to transfer to the new service partner under the Tupe legislation often used in outsourcing deals, said Patrick Kerry, lead negotiator for Unison on the Bradford contract.
"This is a groundbreaking deal, and sends a clear message to the private sector that Tupe transfer is now off the table, and that secondment of public sector staff is the only way forward in any strategic partnership," he said.
Whether this proves to be the case remains to be seen, but the Bradford agreement will certainly give IT directors and staff pause for thought when considering IT outsourcing.
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