Southampton has outsourced its IT services to Capita, despite criticism of the procurement process and concerns about local jobs.
Southampton City Council has signed a 10 year IT outsourcing contract with Capita to upgrade the authority's IT systems and improve its "Gateway" contact centre.
Capita is expected to deliver wider customer services and back office functions, including procurement, human resources and payroll, as well as the processing of council tax and benefit claims.
Starting in October, the company will also develop Southampton's "Gateway" contact centre, with long term plans to relocate and develop council services into a single contact centre.
The council said a customer consultation day is being arranged soon so residents can see what is happening and enable them to suggest improvements they would like to see.
A spokesperson for Southampton told GC News on 23 August 2007: "We are going to start by making minor improvements at the Gateway, which will mean a bit of a face lift.
"But it is going to mean that £25m worth of investment for the council and IT equipment that we could not have put in place in this timescale.
"Some 650 staff will be employed by Capita. They will transfer under a Tupe arrangement, so they will retain their contract terms and conditions."
The contract went ahead despite opposition from unions who wanted an inhouse transformation strategy.
A document published by Unison and the European Services Strategy Unit says the procurement process had been a failure.
It says Southampton had originally shortlisted five private sector contractors. Fujitsu, Vertex, and BT withdrew and Serco was rejected, leaving only Capita. This put the council in a "weak negotiating position with the agenda driven by Capita".
Unison says Capita will "run rough shod" over the council's sustainable development policies by using global supply chains at the expense of local jobs, ignoring the impact on transport and other aspects of sustainable development.
The Audit Commission also identified a number of risks associated with the deal, including whether there is sufficient technical development in the contract and the risk of cost escalation.
Local authorities which have rejected the outsourcing model and developed an inhouse strategy for service improvement include Newcastle City Council. Newcastle recently awarded a contract for the Building Schools for the Future programme to its own IT staff, against competition from major ICT suppliers.
This article was originally published at Kablenet.
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