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Sandwell Council and BT in £300 million partnership

All IT and business services move to BT in 15-year deal, but it's not simply outsourcing, the deputy leader of the West Midlands council said.

By Nicole Kobie, 23 Mar 2007 at 11:33

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Sandwell Council's day-to-day business and IT operations are set to move to BT in a £300 million strategic partnership - just don't call it outsourcing.

As of April, the 15-year "Transform Sandwell" contract will see BT and partner Liberata takeover a wide range of support services, including ICT, human resources, the customer contact centre, accounting and other business processes - all previously handled in-house by the West Midlands council. The 500 council employees who previously did the work are not losing their jobs, but transferring to the partnership at the same rate of pay and conditions of service.

"It's a different type of relationship to traditional outsourcing, where you get rid of your own services," said deputy council leader Steve Eling. "This is a far more dynamic relationship."

Employees were given a choice if they wanted to transfer their employment to BT, but 95 per cent chose to stay with the council, said Eling. BT is building a regional business centre in West Bromwich to house the partnership as well as another 450 new BT employees, bringing more jobs into the area.

Over the next three years, £45 million will be spent upgrading the council's IT infrastructure and computer systems and the council is hoping to continue to develop ICT throughout the 15-year contract.

Because the long-term partnership is flexible, any changes in ICT or other needs can be integrated part-way through the contract. "Part of the reason for this is if you look at how business systems were 15 years ago, you couldn't predict what you'd be doing today," said Eling.

The £300 million cost is about what the council would have spent had it supplied the services on its own, said Eling. But he said the council lacks the specialist experience at boosting efficiency which BT offers.

"We've not gone into this partnership just for a cut in ICT or business services budget, but we're going to get more services out of this than if we'd done it ourselves," said Eling, adding that ICT isn't the council's core business, but it is BT's. "I think from the council's perspective, we got an extra good deal."

An additional procurement plan is in the works, which the council believes will save some £57 million over the 15-year contract.

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