Birmingham City Council has signed an additional £142m IT services contract with Capita covering a 10-year period.
In December 2005, Birmingham chose Capita as its strategic partner to support business transformation and IT within the council.
A special purpose vehicle, Service Birmingham, was set up by Capita and a 10-year, £475m contract to deliver IT transformation was signed in April 2006.
Governance arrangements were also put in place for additional business transformation programmes to be proposed and implemented.
In July 2006, it was announced that Service Birmingham would support the first additional business transformation programme to be approved. This programme is focused on corporate services and has an allocated budget of £88m over three years.
Capita has now announced that the business case for the second of these programmes, to transform customer services, has been approved. This additional programme has been allocated a budget of £142m over 10 years.
Delivery of the customer services transformation programme will again be supported by Service Birmingham and its sub-contractor Axon.
Council deputy leader Paul Tilsley said, "Through Service Birmingham, smarter, more efficient ways of working are being established which have already generated significant savings.
“These improvements are creating a more vibrant, inclusive and forward-thinking city to live in and will place Birmingham at the forefront of transformational government."
Over 500 council employees have been seconded to Service Birmingham and the new IT network.
The council says the corporate services deal (including procurement, finance and business management) has already saved the council £9.5m and claims it will generate savings of £800m over 10 years.
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