City council set to sever ties with service provider
Birmingham City Council is set to sever ties with joint service provider Capita in a move that could save the local authority £43m over the next four years.
The cash-strapped authority has been holding talks with Capita throughout the summer after earmarking the service agreement as an area of potential savings.
Savings in the 2017/18 year alone could be £11.5m.
The initial proposals, aimed at a more flexible working relationship, go before the council’s cabinet today (Tuesday).
Further negotiations will follow, and these are expected to see the maintenance of the current core ICT services contract until March 2021 but with the council ending the joint venture arrangement, which has been in place since 2006, together with some commercial restrictions.
Under the terms agreed, the joint venture will end on January 1, 2018.
As well as delivering the core ICT services currently provided by Service Birmingham, the partnership will focus on project-based work to deliver savings over the next three years and the continued implementation of the council’s ICT & Digital Strategy – which was approved by the cabinet in October 2016.
Council leader Ian Ward said: “As we’ve said before, the shape and objectives of the council are changing due to a wide range of factors including reduced funding for local government, changes in population profile and ever-evolving technology.
“Our IT and Digital Services must support and lead in addressing these challenges and achieving these objectives, whilst providing flexibility, added value and supporting the council in continuing to deliver day-to-day services whilst making this transition.
“The new deal will see the council gradually take more control of its ICT & Digital services between now and 2021, by Capita and the council working together on the transition. Through these negotiations we have been able to secure significant savings in 2017-18, as well secure future savings over the remaining three years of the contract.
“We need to protect frontline services and begin a process that will enable us to meet other future challenges.”
