Council to wind up joint IT venture

Service Birmingham, the joint IT venture between Birmingham City Council and Capita, is set to be wound up three years early in an attempt to save £43m of taxpayers’ money.

The joint venture, which saw Capita run the city’s ICT systems, council tax collection services and formerly ran its call centre, was set up in 2006 – but has been dogged by controversy since its inception.

The initial contract was condemned as being far too expensive at its peak in 2011, costing the council £120m a year at a time of cuts. It currently costs £70m a year.

Now, according to media reports, the council and Capita have agreed to end it by March 2018 and its 200 staff will be transferred back to the city council workforce, in what a council spokesperson labelled a ‘reshaping’.

The spokesperson commented: “The proposal, although keeping the core services contract in place until 2021, allows for the joint venture arrangement, which has some commercial restrictions, to be dissolved.

“The new partnership will deliver a mix of core services currently provided under Service Birmingham as well as additional project-based work enabling additional savings to be delivered over the next four years, helping the council to meet its objectives.’

The council added that, in future, smaller contracts for new systems, maintenance and upgrades will be offered, allowing local suppliers to bid alongside Capita.

Labour council leader John Clancy said the move would mean savings of £11.5m this year and could save services like libraries, social care and parks from more cuts.

He said: “I made it clear upon becoming council leader we could not continue to spend a vast amount of money on ICT given the tough decisions that have to be taken about cutting spending in other departments.

“This agreement means that Birmingham City Council will have more to spend on frontline services and to deliver key policy priority pledges on inclusive growth, housing and social services.

“It is intended to bring about 200 Capita employees back to the city council and we are also committed to putting future ICT projects out to the market so that Birmingham and West Midlands companies can bid for the work.”

The council is also looking to make further savings through IT systems, it confirmed.

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