Southampton City Council has selected Capita as a preferred supplier for a 10-year £290m IT outsourcing contract, but the Labour Party on the split council has promised to cancel the deal if it wins control of the council in the forthcoming local elections.
Although Labour approved IT outsourcing for some of the council’s operations when it was in control, it is angered that the remit of Capita has been widely extended from basic IT services and a call centre to property services, HR, payroll, revenues and benefits, and procurement.
Capita has been accused by union Unison and local politicians of bumping up the contract value by insisting that the authority must outsource additional services to make the deal work. Capita has not responded to these claims. Its position has not been helped by the fact it was the only bidder on the shortlist.
Serco was rejected at an early stage by the council and BT pulled out of the bidding process.
Southampton will now be hoping that it does not fall into the same problems experienced by Swansea council last year. The Liberal Democrats there pushed a major outsourcing deal with Capgemini, only for Labour councillors and Unison to put up stiff opposition to the deal.
While Unison started a strike which eventually petered out after months of intermittent action, the deal was left in tatters when the council ran out of money to put in place key elements of the technology that were supposed to deliver costs savings.
The Southampton contract includes the provision of a new contact centre and a “one-stop shop” which will become the first point of contact for all council services, the same sort of offering promised by Swansea, and which was finally axed at the beginning of this year.
The Southampton deal will see 600 Unison staff transfer to Capita, a move the union says it will resist. The union has already started industrial action at the authority, including a day’s strike action, overtime bans and work-to-rules.
While two-thirds of Southampton councillors have voted for the deal, the Labour Party plans to make the deal a key election issue.
Councillors will make the final decision on whether to go ahead with the partnership in July.
Adrian Vinson, leader of Southampton City Council, said, "This partnership promises to give the people of Southampton the best possible customer service at the best possible value for money.
“Capita has a proven track record in working alongside local authorities to provide excellent services for local residents and businesses. We will continue our negotiations with them to ensure our citizens and staff get the very best deal out of this partnership.”
Paul Pindar, chief executive of Capita, said, “We look forward to working with the council to ensure that the local community truly benefits from this partnership.
"Our extensive experience of transforming public services combined with the council employees` expert knowledge of the city will provide a solid platform to deliver enhanced services.”
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