West Sussex County Council has chosen Capita as its preferred partner in a 10-year back office outsourcing contract.
Under the contract, worth approximately £154 million in additional revenue, Capita will deliver services including HR, payroll, finance, online service delivery, office services, procurement and pensions administration.
The contract is expected to be signed later this month, with work starting from September.
Sarah Burnett, head of public sector outsourcing at analyst firm NelsonHall, said that the contract would have been highly contested.
“There aren’t many of these multi-process contracts coming through. Serco and Arvato would have been competitors and been very disappointed at not winning,” she said.
She added: “They haven’t said what savings they would have to achieve yet. I expect savings will be a big part of it.”
Burnett also believes that the breadth of the services being outsourced will mean a “reasonable level of staff transfer” will occur.
In October 2010, the council brought in Capita to provide IT services as part of a seven-year deal worth an ‘initial’ £56 million.
At the time, the council said the deal would provide a “flexible and sustainable IT service at significantly lower cost”.
Serco already has a desktop management contract with the council, and, through its acquisition of The Listening Company, a contract for West Sussex’s contact centre.
“Capita will have to work with them,” said Burnett.