Council takes specialist skills back in-house

Middlesborough Council extends BPO contract

Middlesbrough Council has extended an existing business process outsourcing contract, but has chosen to leave some specialist services out of its scope.

The North England local authority said its partnership with business services group Mouchel has delivered in excess of £38m in savings over the past 10 years.

It signed a five-year contract extension last week, which it said is expected to deliver a further £12m in savings. But the deal will see a number of services returned to council control in June 2011.

The partners told Computing today that the new deal still included most of the technology originally outsourced to Hyder Business Services (which was acquired by Mouchel in 2007), in a deal involving the transfer of nearly 900 personnel in 2001.

But while Mouchel will continue to provide all the council’s IT development, support and maintenance, the people who provide the direct service for the council will move back in-house.

The functional business areas affected include accountancy, enterprise centres, environment quality management, facilities management, leisure business development, the press office, procurement, non-contact centre reception services and valuation and estates.

In the case of its accountancy processes, for example, Mouchel confirmed its team will continue to manage the council’s SAP system and all the related infrastructure, networks, PCs, laptops and servers.

A Mouchel spokesperson added that this would allow the council to continue its transformation programme around a series of jointly owned objectives, which are underpinned by IT.

“We are working on such projects as voice over IP technology, complex desktop management strategy including thin clients, mobile working technology and web site development and strategy, as well as electronic document and records management."

Mouchel will continue to provide frontline customer services and administration services, council tax and housing benefits administration, finance services including accounts payable and receivable, payroll and pensions administration, as well as human resources and IT services.

A Middlesbrough Council spokesperson confirmed the deal, but said they had nothing to add to comments already made by the council chief executive.

Ian Parker, chief executive of Middlesbrough Council, stated: “We will continue to work together with Mouchel to improve working practices and value for money for the people of Middlesbrough.”

Rachael Stormonth, senior vice president at market intelligence firm NelsonHall, told Computing that, where the original contract was fixed-price, this extension has more flexible arrangements for the council, being based on a maximum price and with the capacity to reduce it.

“This demonstrates the fact that councils will be needing the IT expertise of service providers, having made as many efficiencies as possible,” she added. “They will be looking to the providers to make service delivery even cheaper and move beyond just efficiencies to additional savings.”