Swansea backtracks on outsourcing mega-deal

Swansea council has axed the planned second phase of an e-government contract with Capgemini, saying the proposals were too expensive.

Share

Swansea council has axed the planned second phase of an e-government contract with Capgemini, saying the proposals were too expensive.

Instead the South Wales council intends to adopt an “incremental approach” to delivering the programme, aimed at improving public access to services.

Swansea signed a 10-year £83m outsourcing contract with Capgemini in January 2006, after a prolonged dispute with the council employees’ union, Unison that saw two months of strike action. The dispute was settled after the council agreed that a smaller number of staff would be transferred to Capgemini than originally planned.

The deal covered the first phase of the council’s programme and was aimed at improving the efficiency of back office and support services, with new IT systems to be designed and built by Capgemini, with the outsourcer also taking over management of the council’s IT services.

It included an option to proceed with a second phase, focusing on customer-facing services, such as the development of a call centre, a face-to-face customer contact centre and an interactive website. Both phases together were expected to produce savings of £72m.

But council leader Chris Holley said the phase two proposals were not affordable. "Continuing reviews of our option to sign up to a Capgemini-managed phase two have shown that there is not a solution that is acceptable to the council.

"There are significant budget pressures this year and we must cut our cloth according to what we can afford. That applies to e-government as much as it applies to all the other services we provide.”

The phase one contract will continue, with a new savings target of £26m. "Phase one will improve the efficiency of support and back office services and will start to show benefits for the council during 2007," Cllr Holley said. The council has so far identified £7.4m of achievable savings across the 10-year duration of the contract.

The council would now examine alternative options for delivering the second phase, a spokesperson said.

Capgemini said it had worked with the council to consider a range of options for phase two, all of which “would have cost less than the original quotation”.

Find your next job with computerworld UK jobs