Hundreds of IT staff at Birmingham City Council are to be seconded to a joint venture with Capita, after the authority named the IT services firm as preferred supplier for a 10-year £420m technology contract.
The deal, which will see 450 council staff seconded to the joint venture organisation, will lead to the creation of hundreds of new jobs in the city, according to Capita.
Capita, which will start work on the contract next April, is in negotiations with trade unions on terms and conditions.
The council hopes to avoid the type of industrial dispute that took place at Swansea Council last year, as a result of a big outsourcing deal with Capgemini.
The joint venture company has provisionally been called Service Birmingham. The deal has to be ratified by the council’s cabinet later this month.
The council said it is aiming to save £1bn as a result of a projected 15% increase in productivity through the partnership.