An IT services joint venture between Birmingham City Council and Capita is failing to perform as expected, says a new review of the long-term operation by consultancy Best Practice Group.
According to a news report, the review concludes that Service Birmingham, as the JV is called, needs "serious improvement" if it is to meet its targets.
Ian Ward, deputy leader of Birmingham City Council, has been quoted by BusinessDesk.com as saying the council will go on working within the partnership, which employs 1,000 staff, to try to improve the situation over the next 12 months.
"The local authority said it was concerned about the poor performance and the next 12 months were critical to the future of the contract. It said it was important the improvements were addressed as soon as possible," according to the report.
The contact centre's affordability will be assessed and new processes developed for project initiation. Also, the Birmingham.gov website is to be redesigned. Some £20m of savings are required every year, it said.
Service Birmingham, set up in 2006 and extended in February 2011 until 2021, is intended to provide "world-class ICT services" as well as manage the council's revenue service and contact centre. It is also required to deploy various other large and small-scale IT-enabled solutions to the council.
Specific projects have included the purchase and deployment of self-service kiosks in local libraries, and a new client e-records system for court deputies across 20 local authorities.
"Our aim is to support the council to transform the way they operate, by improving services, offering economies of scale and efficiencies to meet the council's business needs. We also offer our services to new customers," according to Service Birmingham.
A case study on the project released by Capita indicates that £1bn was initially meant to be saved via the JV over 10 years. However, the contract has already been extended for five years more, to 2021, and expanded to include a revenue service.
The project includes IT and communications including contact centre services, education services, business transformation, and revenue services.
"In a little over a year, all three existing ICT networks were replaced with one quicker and more robust network linking 450 schools, 60 libraries and 240 other sites. This has saved £350,000 in annual infrastructure costs and cut management costs by 40 per cent a year," Capita said.
"Productivity and call-handling quality have improved and customer satisfaction levels have increased."
About £244m of savings were delivered by early 2011, the services provider said, and 520 jobs were created via the joint venture by March 2011, with £700,000 a year spent on staff training and development.
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