Southampton city council has selected Capita Group as preferred bidder to develop a 10-year strategic partnership expected to be worth £290m - nearly double the original value of the contract.
The contract will cover the provision of IT, customer services, human resources, payroll, revenues and benefits, procurement and property services.
Ovum analyst Samad Masood said: “It is worth noting that the Southampton bid has taken almost two and a half years to reach this stage. In that time the value of the deal has almost doubled from the £150m that Southampton was originally expecting to pay.”
A council spokesperson said the value had gone up because more services had been added to the proposed contract during the tendering process. This had been lengthy as "elements of the council wanted more investigations and other bidders to be considered". She added: "It takes as long as it takes."
The contract will cover the development of a contact centre and an improved one-stop shop, which will become the first point of contact for all council services. It is expected to include the transfer of 600 council staff to Capita.
Southampton is looking to the contract to improve public services while cutting costs. Council leader Adrian Vinson said: "This partnership promises to give the people of Southampton the best possible customer service at the best possible value for money. Capita has a proven track record in working alongside local authorities to provide excellent services for local residents and businesses."
The council is expected to make a final decision on the contract in July, with the partnership taking effect from 1 October. But the decision to award preferred bidder status to Capita was not unanimous. At a meeting of the full council, two thirds of councillors voted to proceed with negotiations with the outsourcing giant.
In May 2005 the council extended an outsourcing deal with Unisys, covering its revenues and benefits services for a further three years to 2009.