Southampton City Council has agreed to sign a controversial 10-year partnership deal with Capita that will see IT and a range of other services outsourced.
But the council would not say how much the contract was now worth.
In March, when Capita was selected as preferred bidder for the scheme, it emerged that the value of the contract had nearly doubled to £290m – and that Capita was the only remaining bidder.
When the tendering process began, more than two years previously, a £150m price tag was attached to the scheme, which then covered only IT and customer contact services.
The contract now been given the go-ahead by a full council meeting will cover IT, customer services, human resources, payroll, local taxation and benefits, procurement and property services.
The deal has been controversial, sparking industrial action by Unison trade union members – protesting against the proposed transfer of 650 staff to Capita – and sharp divisions in the council chamber, where Labour councillors have opposed the move.
The party threatened to block the outsourcing contract if it won control of the council – then split three ways – in May’s local government elections. But the poll saw Labour and Conservatives secure equal numbers of seats, with the balance held by the Liberal Democrats.
Both BT and Capita had been invited to take part in competitive negotiations in September 2006, while a third proposal from Serco was rejected. But BT pulled out on 27 November, leaving only Capita in the running.
In March the council said the value had gone up because more services had been added to the proposed contract during the tendering process.
But following the council decision to award the contract to Capita, a spokesperson refused to confirm the current value of the deal, saying: “We are unable to provide this figure as it is still confidential. It is commercially sensitive information and, because the contract has not been entered into, anything is subject to change.”
Southampton councillor Jeremy Moulton, cabinet member for resources, said the deal would bring investment and savings.
“By working with Capita the city council will benefit from millions of pounds of investment into customer services. We will also save the taxpayer millions of pounds over the term of the contract; money which can be put back into front line services.”
The council is expected to sign the contract early in August, with staff set to transfer to Capita on 1 October.