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Southampton City Council could save £24m by renegotiating Capita deal
4:00am Tuesday 5th November 2013 in News
CIVIC chiefs in Southampton hope to save £24m by renegotiating a key contract with the city council’s main private partner.
Bosses at cash-strapped Southampton City Council say they can no longer afford their current contract with Capita, which was signed back in 2007.
They are currently putting the finishing touches to a new deal that will significantly alter a number of council services, as well as saving £2.4m a year.
But some critics have labelled the new deal, which will see some council services run online, “atrocious” and unfair to residents who do not have access to a computer.
The council signed a £290million, ten-year deal with outsourcing giant Capita back in October 2007, which saw the firm set up a base in Guildhall Square alongside council departments.
The deal saw 650 council staff move over to Capita, as the firm took over council departments such as customer services, IT, human resources, property, tax and benefits.
But with the council needing to make £60m of savings over the next three years, the council can no longer afford the contract in its current form.
The renegotiated contract, which is expected to be signed off by the council’s Cabinet this month, will run until September 30, 2022, and could provide savings of £24m over the next ten years.
‘Jobs neutral’ Immediate savings will be realised through changes to Capita’s service delivery, while the new contract will allow the council greater flexibility in its control over outsourced services.
And it will also lead to a number of services run by Capita and used by residents being carried out online.
A spokesman for Capita said it would “not be appropriate” to comment on the value of the contract, or whether jobs may be lost at Capita as a result.
But a council report contained details saying the contract will be ‘jobs neutral’, with job losses offset by new posts.
Among the services which could soon be done over the Internet are benefit and council tax claims and reductions, or applications for new bus passes.
Paper versions of forms will still be made available on request for people without access to the Internet, while face-to-face interviews will be available.
Southampton and South West Hampshire Trade Union Council president Bobby Noyes said: “I think it’s atrocious. Capita say that people can ask for a face-to-face interview but they have to have a good reason.
“One of the reasons that some people like face-to-face meetings is because they are illiterate and ashamed to tell anyone about it.”
City council leader Simon Letts said: “The key element here is not the savings per se, but the flexibility, because we signed a very fixed contract with them originally.”
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