Birmingham City Council has extended its outsourcing contract with Capita Business Services by five years to March 2021.
The council and Capita formed a joint venture called Service Birmingham in 2006 to provide ICT and contact centre services under a 10-year contract. After a review, the council has now agreed to extend the contract to 2021.
A spokesperson for Birmingham City Council said the ongoing deal would save the organisation about £35m over the next four years, contributing to the £330m in savings required by 2013/14 as a result of the government's Comprehensive Spending Review.
The newly extended deal will see 152 council revenues staff transferred to Service Birmingham under Transfer of Undertakings (Protection of Employment) regulations.
"Our relationship with Capita through Service Birmingham has been a successful one, as we have begun to modernise services despite this being a huge challenge for an organisation that had previously done things in traditional ways," said Randal Brew, cabinet member for finance at Birmingham City Council.