London councils look to outsource back-office functions in a deal worth over £1bn

Westminster City Council, on behalf of many other local London authorities, has revealed details of a framework agreement for councils to outsource back-office functions, in a bid to improve efficiency and cut costs.

An online tender details that the contract will be divided into four lots, with some potentially worth more than £1bn.

The framework is set to be one of the programmes under the wider London Athena Programme, which is a pan-London initiative aimed at creating a single ICT platform for public sector organisations in the region.

Westminster City Council, the London Borough of Hammersmith and Fulham, and the Royal Borough of Kensington and Chelsea (the ‘Tri-Borough Authorities') have already aligned themselves in a strategic partnership, where they operate numerous shared service schemes, and are leading this outsourcing agreement.

Over 15 other London councils are set to benefit from this agreement, where they will have the choice to outsource some of their back-office functions.

The four lots that form the framework include:
• Finance, procurement, human resources and payroll – worth up to £1.05bn
• E-sourcing – worth up to £35m
• Property asset data management – worth up to £35m
• Business intelligence – worth up to £70m

Only one service provider will be selected for each lot and it is up to the councils, depending on individual circumstances, whether they use the services.

The tender reads: "Currently the Council [Westminster] and the other participating authorities each use a variety of service providers to supply different parts of their respective back-office services. This means that the requirements of each of the Council and the other participating authorities under the framework may vary."

It is hoped that this agreement will allow councils to benefit from streamlined back-office services, improve process efficiency and cost effectiveness.

The framework will last for four years once service providers have been selected, and interested parties have until 27th February to express an interest in participating.