Rochdale Borough Council is set to sign a 15-year £187m outsourcing deal this month with preferred bidder Agilisys and facilities management company Mouchel Parkman.
Under Rochdale's deal, Agilisys will be paid about £8m a year to run a contact centre, manage the council's IT and transform its HR and payroll systems.
About 60 council staff who work on corporate systems and another 20 who work on IT for the local education authorities' schools will be seconded to Agilisys under the deal. Claire Hedley, project manager of Rochdale's strategic partnership, said the council had decided to offer secondment because "it is much easier to reassure staff in relation to terms and conditions, including pensions".
Although Agilisys is a relatively small supplier of outsourcing services to the public sector, it already holds contracts with North Yorkshire ICT Partnership, Cumbria County Council and the London Borough of Hammersmith & Fulham.
Rochdale is the latest local authority to opt for a long-term outsourcing deal. Bradford council last month signed a 10-year deal with IBM and Serco Solutions worth £158m, which involved the secondment of its IT staff.
Swansea council is preparing to sign a long-term deal with Capgemini and Barnsley Council is looking at bidders for its own outsourcing contract.
John O'Brien, an analyst in Ovum's government practice, said the Gershon cost-saving agenda was driving many of these large deals. More efficient use of IT could be one of the most effective ways of making the cuts to total expenditure Gershon demanded, he said. "If you look at some of the contracts happening in local government, the councils are looking to consolidate quite a number of supplier relationships.
"If they are looking at front office and back office, they can deliver greater efficiency savings," O'Brien added.
Swansea IT staff on-side
Swansea Council's delayed plans to outsource its IT to Capgemini have been boosted by the agreement of 73 of its 90-strong IT department to accept transfer to the new service provider from 1 October.
The remaining 17 IT team members will continue their roles as local government employees, and will manage the outsourcing relationship for the council and provide other services, such as training.
Swansea's IT staff went on strike for two months last year after the council advertised for an outsourcing company to take over its IT functions.