Northamptonshire County Council will reduce its workforce from 4,000 to 150 over the next five years as it attempts to make large budget cuts, with community services following IT into an outsourced model.
The council expects its budget to fall £81m in the next five years and the cost of services to increase by £99m in the same period, so needs to make cuts.
According to the Northampton Chronicle, councillor Jim Harker said the traditional model for the council and local service delivery is unsustainable.
“The method of paying for local services through government grant no longer stacks up and, in Northamptonshire, our demand is far outstripping our income, as we continue to play our part in tackling the national deficit,” said the leader of the council. Councils across the UK have already outsourced thousands of IT jobs and other council services are going the same way.
Despite the substantial reduction, Northamptonshire County Council CEO Paul Blantern said there would be minimal redundancies, as most current employees will be transferred to the new contractors.
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Outsourcing the future for local authorities
Recent research carried out by the Local Government Journal and Hay group said the number of staff directly employed by a fifth of all local authorities will reduce 35% by 2020 as a result of more outsourcing.
The research of 267 council CEOs, carried out by the Local Government Journal and Hay group, revealed that 51% of councils intend to outsource more, compared with 10% that said this in 2013.
Other findings of the research found 7% of council CEOs think their organisations would outsource all their services in the future, with the council itself the provider of last resort. Some 5% of CEOs said they expected the council to outsource between 80% and 100% of its services by 2020, while 16% said their authority would bring more services in-house.
The 150 remaining workers at Northamptonshire County Council will include those working in business intelligence and market development teams. One former IT head in local government told Computer Weekly it is important that councils retain some IT experience.
“It is unlikely that you would see all IT outsourced, because you do not want to outsource your ability to plan for the future of IT,” he said.
“The role of the IT department will be to decide what you outsource, who you outsource to, and how that will affect your business.”
He said most applications today are available through the cloud and technology from different suppliers works together, which makes it easier to outsource. “People are buying lots of different technologies from lots of different suppliers, which lends itself well to outsourcing,” he said.