Liverpool City Council will save £30m over three years by taking its Liverpool Direct Ltd (LDL) joint venture back in-house.
The council decided to cancel the £70m-a-year IT joint venture deal with BT last year because it needed to make budget savings.
The joint venture, which was 60% owned by BT and looks after the council’s business processes, will be brought in-house to Liverpool City Council on October 31 2014.
“LDL has successfully delivered service improvements throughout its life. The relationship with BT has been central to this success,” said the mayor of Liverpool, Joe Anderson.
“We are grateful that BT remains committed to serving residents and businesses in Liverpool but it is timely, given the continued financial climate for LDL to move in a new direction to become fully integrated into Liverpool City Council.”
In a Mayoral Recommendation document, the council said negotiations had been successfully completed over a six-month period to transfer ownership of LDL to Liverpool City Council.
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“This delivers the best value option for Liverpool City Council, reflecting an internal service delivery model with no further investment requirement from BT and hence no return needed to be paid to BT for such investment,” said the document.
The LDL partnership with BT began in 2001 and was refreshed ten years later. The venture ran the council’s call centre, revenues and benefits, human resources and IT services.
But Liverpool city council has saved more than £330.2m over the six-year period, as it claims it has been among the hardest hit by Government funding reductions.
“Reductions in central government general grant funding for the City Council are almost certain to continue after 2016/17 as both main political parties have committed to further reduce the size of the national budget deficit whilst committing to protect some public services such as Health and Education," said the document.
"Coupled with an increased demand for social care services this will mean that further substantial budget savings will be required from 2017/18 onwards."