Swansea Council has recommended its cabinet not to proceed with phase two of a controversial outsourcing programme with Capgemini.
The council had planned to outsource its back-office functions and IT services in phase one of an £83m deal with Capgemini, after 18 months of wrangling with council IT staff, which included strike action by Unision members.
Phase two of the deal was due to create a new call centre and website front office to give local people a single point of contact with the council.
But council leader Chris Holley said that over the last year work by the council and Capgemini had shown that the phase two proposals were not affordable.
"Phase one will improve the efficiency of support and back-office services and will start to show benefits for the council during 2007," he said.
It was accepted that £7.4m of “cash-realisable benefits” were achievable over the 10 years of the phase one contract, a spokeswoman said. However, the council agreed to spend £40m more than its IT budget to achieve this saving. Originally, the council had predicted it would save £72m.
Capgemini was not available for comment.
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