Sandwell council in the West Midlands has named BT as the preferred bidder for a £300m 15-year contract to transform its back-office functions.
If the contract is signed in the next couple of weeks as planned, BT will begin to plough about £50m into new systems and a shared services centre.
BT and its joint bidder, outsourcing provider Liberata, aim to use the investment to run the back-office functions at a reduced cost over the lifetime of the contract. The deal will initially concentrate on improving Sandwell’s IT infrastructure, HR, finance, payroll and customer services functions.
“Authorities across the country are exploring partnering in response to government’s modernisation agenda and some councils are already operating such arrangements,” council leader Bill Thomas said.
The council has said that the 525 council employees whose jobs will be affected by the partnering plans would be protected. “There will be no compulsory redundancies and we will be fully consulting them about the best way to secure their future,” Thomas said.
The council has also forecast that the deal, to come into force in April, will create at least 450 new jobs in the area, although it has not specified whether the new jobs will involve delivering council services or working for BT’s other clients.
Council workers have threatened to strike if the deal goes through. They are angry at the prospect of local government jobs being transferred to the private sector.