Sheffield City Council has confirmed Capita has been given a £200m IT services contract, after beating Fujitsu to the deal.
As part of the "Outstanding Sheffield Programme", from January 2009, Capita will provide ICT, HR transactional services (recruitment services, employment services and staff performance management services), payroll, revenue and benefits services, and financial business transactions (invoicing and dealing with creditors and debtors).
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Capita will take over from Liberata and Affiniti, which are the council's current suppliers for all of these services, except HR transactional services, which are currently provided in-house.
Sheffield says the contract will be covered by existing council budgets and future cost savings as a result of the deal.
The contract is for an initial seven years, with the option to extend it by three further two-year periods.
Councillor Simon Clement-Jones, cabinet member for finance and customer-focussed services at Sheffield City Council, said, "We said we would make Sheffield City Council more efficient and better for customers, and this change is a huge statement of our determination to deliver that for the people of Sheffield.
"There will be benefits for the environment too, as the council will be reducing its carbon footprint. Above all, there will be a step change for the better in these services."
There are no expected job losses. Staff who work for Liberata and their sub contractor Northgate on these services will be transferred to Capita.
Sheffield City council staff working in HR and a small number of staff working in IT will also transfer across to Capita, retaining the same terms and conditions of employment.