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Five councils in different parts of England will share IT services from outsourcer Capita.
Hart district council and Havant borough council in Hampshire, Mendip district council in Somerset and South Oxfordshire and the Vale of White Horse district councils in Oxfordshire expect to save over £50m over nine years between them.
The project began in 2014 but the contract awards have just been agreed by all councils. Capita is providing back-office services, Vinci facilities and property services to the councils.
Shared services have become common in local government – to reduce costs without lowering service levels – but are normally contracted between authorities in close proximity.
A statement from Vale of White Horse district council said this was the first deal contracted between councils from different parts of the country. “This proves location is no longer a barrier to achieving savings, if partners are committed to joint working and share the same goals.”
Councillor Matthew Barber, leader of the council, said: “Over the past five years we’ve made enormous savings, thanks to our shared working with South Oxfordshire. Partnering with more councils to achieve bigger economies of scale was the next logical step to help us protect our key public services. Services will be maintained and improved for residents but, in the background, we’ll be much more cost-effective.”
Leader of South Oxfordshire district council, councillor John Cotton, added: “The bigger picture here is that many councils are having to cut front-line services due to pressures on their budgets – we spotted this opportunity to make significant savings early on, so we were in a better position to weather any future financial storms and continue to provide the most efficient public services possible.”
Read more about local government outsourcing
- IT outsourcing in the UK public sector accelerated in the second half of 2015, according to research.
- The number of staff directly employed by a fifth of local authorities will reduce 35% by 2020 as a result of outsourcing.
- Pioneering councils are moving to the public cloud and aiming to deliver 'government as a platform'.
The contracts are expected to start in South Oxfordshire and the Vale of White Horse in August 2016, and for the remaining councils between July and October 2017. The councils will manage the contracts through a joint monitoring team, comprising staff from across the organisations working together.
Councils bring services in-house
While many councils weigh up their outsourcing options to meet tight cost-cutting targets, some are going the other way and looking at in-house alternatives to IT outsourcing.
For example, Bournemouth Council could soon bring outsourced IT services including back in-house, to gain better control over costs and increase its financial flexibility.
Cornwall Council and BT’s £160m outsourcing deal recently came to an end, with the council transferring 270 staff back in-house. This followed the High Court decision in December 2015 to allow the council to end the contract.
Meanwhile, in December 2015 Dorset County Council cabinet rejected outsourcing as an option for its back-office services, including IT, because it would not provide the flexibility the authority wanted.