Southampton City Council’s 10-year partnership deal with Capita has been confirmed as worth approximately £290m by Capita – nearly twice the original price tag attached to the scheme.
The council and Capita have both confirmed the deal, which was agreed between the parties last month.
But at that stage the council would not say how much the contract was worth, despite the £290m figure being made public in March when Capita was selected as the preferred – and only remaining – bidder.
When the tendering process began in 2005 the scheme was being priced at a £150m and only covered IT and customer contact services.
The contract now given the go-ahead by the council covers 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 who protested against the proposed transfer of 650 staff to Capita. It also open up divisions in the council chamber, where Labour councillors 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.
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 key customer-focused and beind the scenes 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.”
Staff are due to transfer to Capita on 1 October.