Birmingham negotiates £150m ICT savings

Birmingham City Council is expected to approve a package of measures aimed at saving £150m on the amount it pays to its ICT provider over the next seven years.

The council’s cabinet will next week consider a review of its contract with Service Birmingham, a joint venture that it owns alongside supplier Capita.

Plans include new controls over projects, a commitment to create a revised ICT strategy and an agreement to identify further savings beyond the £150m figure.

The council’s deputy leader Ian Ward, said: “We have negotiated an agreement with Service Birmingham which provides a major step forward in reducing our cost base for ICT.

“On balance, the council considers the risk of changing ICT provider at this time, too risky, would take a considerable period of time to procure and would cost additional tens of millions upfront in early termination charges and re-procurement costs.”

He said that both parties needed to work harder to make the partnership work better than it has so far.

“We need to make sure we have an ICT strategy that is fit for purpose and that we improve our control and planning for projects,” he said.

Part of the plans will also involve bringing its contact centre back in house from Service Birmingham. This move is aimed at delivering services more efficiently than at present.

Ward said: “Services don’t stand still and we now need to take arrangements on to the next level with a focus on the customer. Following an extensive review of what is possible, by studying what other providers and organisations are doing, we feel the greatest benefit will come from an in-house service.

An urgent report will go to the council’s cabinet on Monday 30 June to conclude the review of the Service Birmingham contract.

Cabinet will be recommended to approve the continuation of the ICT and revenue contracts in return for substantial savings over the remaining seven years of the contract.

Subject to the cabinet decision, heads of terms will be signed as soon as possible, followed by consultation with employees.

The aim is to sign the revised contract being signed by end of September 2014, with savings backdated to 1 April 2014.

The Service Birmingham contract, initially started in 2006, was extended by the parties in October 2010 and runs until 31 March 2021, covering ICT, contact centre and revenues.

Last week, the council agreed to reject a cloud solution for back-up infrastructure for its core ICT, proposing instead to spend £1.3m upgrading its existing data centres.

Colin Marrs

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