Birmingham City Council has signed a £142m, 10-year deal with outsourcing firm Capita to transform its customer service operations.

The deal was awarded to Service Birmingham, a partnership between Capita and the council established to deliver IT transformation projects.

It is the second project to be awarded to Capita, the first of which was focused on procurement, finance and business management, valued at £88m over three years.

The customer service programme will overhaul the way the council interacts with its customers and increase the efficiency of IT to release staff for front line services.

‘The first deal for corporate services has apparently already delivered £9.5m in savings, and is due to generate an impressive total of £800m over 10 years,’ said Ovum analyst John O’Brien.

‘The customer services transformation meanwhile is likely to be another programme driven by the need for greater efficiency and more effective service delivery,' he said.

Capita has already implemented a new ICT network that has increased stability and significantly reduced costs of service delivery for Birmingham.

‘If Capita continue to impress Birmingham it could still win further transformation programmes in the areas of people management, information management, children's services and property management,’ said O’Brien.