Contract extension offers savings solution

By on 22/11/2010 in News

Plans that would save Birmingham City Council around £135million over the next decade are to be discussed by Cabinet members on November 29.

Councillors are being asked if they want to extend the authority's existing ICT and Contact Centre contract with Service Birmingham for an extra five years through to March 2021.

The proposal, if approved, would also cover the back office functions of the council's revenues service for the first time from the start of the next financial year.

As well as generating £135million of gross savings for the council over the next ten years, the plan would seek to improve Council Tax collection rates from 96.3 per cent to 98 per cent by 2017, which would represent an increased annual income of £4.8million.

In terms of the council's response to the predicted £330million savings required by 2013/14 as a result of the Government's Comprehensive Spending Review, it is forecast that the proposal will contribute £35million over this time.

Strategic matters relating to the revenues service such as the setting of the level of Council Tax will remain the responsibility of the local authority, while the council's existing 152 revenues staff would transfer to Service Birmingham under TUPE regulations.

Cllr Randal Brew, Cabinet Member for Finance at Birmingham City Council, said: “This proposal delivers considerable efficiencies for the council and offers value for money in its approach - at a time when our focus needs to be on both more than ever before.

“We have left no stone unturned to ensure the case for this stacks up, and are confident it will help the council meet the unprecedented financial challenge it faces.

“Our relationship with Capita through Service Birmingham has been a successful one, as we have begun to modernise services despite this being a huge challenge for an organisation that had previously done things in traditional ways for a very long time. We need to keep this momentum up over the coming years and the proposals will do this.”


Background information on proposal

Service Birmingham was created in 2006 to initially provide ICT and Business Transformation Services to Birmingham City Council until March 31, 2016.

The agreement contained a provision to extend the partnership arrangement for a further five years. In 2008, Cabinet approved partnership arrangements for the Contact Centre.

Early in 2010, with Birmingham City Council facing unprecedented financial pressures, Executive Management Team initiated a series of reviews to address these and to mitigate the risks to vital frontline services.

As a response to the above, in June 2010, Service Birmingham made a proposal to support efficiency savings and service improvement. This proposal was considered by senior officers and members to review it for appropriateness and value for money, before now reaching the stage where Cabinet approval is now sought.

Notes to editors

1. Business Transformation is Birmingham City Council's ambitious nine-strand programme which aims to modernise and enhance services delivered across the whole authority to citizens. It is projected that the programme will realise benefits of £1billion over the ten years to 2016.

2. Service Birmingham is a strategic partnership between Birmingham City Council and Capita which will support a transformation in the way the council works; improving services and contributing to its efficiency agenda. This strategic partnership forms part of the council’s objective to find better and more innovative ways of delivering services for the benefit of employees and citizens. The principle of this joint venture focuses on the provision of cost effective, sector leading, ICT services and in supporting the council in achieving its business transformation objectives.

3. Transfer of undertakings (TUPE) – The Transfer of Undertakings (Protection of Employment) Regulations (TUPE) protects employees’ terms and conditions of employment when a business is transferred from one owner to another. Employees of the previous owner when the business changes hands automatically become employees of the new employer on the same terms and conditions. It is as if their employment contracts had originally been made with the new employer. Their continuity of service and any other rights are all preserved. Both old and new employers are required to inform and consult employees affected directly or indirectly by the transfer.

For further information contact Kris Kowalewski on 0121 303 3621

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