Outsourcing deal with Balfour Beatty will secure jobs and contribute to £47m savings target, says council
North Tyneside council is to outsource all its ICT services, along with finance, procurement, revenues and benefits, customer services and human resources to Balfour Beatty.
The company has been named preferred bidder for a contract which is intended to help the north east council to cut its costs. North Tyneside faces budget cuts of 28% and has a target to save £47m over the next four years.
All the services to be delivered by Balfour Beatty are currently provided in-house. North Tyneside said that to continue with this would have resulted in the loss of more than 300 jobs and significant reduction in services.
It considered sharing services with neighbouring councils, but this was ruled out as it would not have delivered the required level of savings.
The decision to outsource services to a private provider will see 420 council staff transfer from over under TUPE regulations.
Asked how the company can retain a full complement of staff when North Tyneside would have to have reduced its headcount, a council spokeswoman said: “Balfour Beatty agreed to take our staff, but the company can use those staff for other projects, and they may be working for other councils, or the health service, for example.”
Balfour Beatty said that it expects the contract to be worth up to £200m if the initial 10 year term is extended by a further five years.
The council has also named Capita Symonds as its preferred partner for a second package, which includes property services, planning, engineering services, consumer protection and environmental health.
Linda Arkley, North Tyneside’s elected mayor, said: “The partnership with external providers is the best solution for the council, its taxpayers, its staff and the borough.
“The partnership options we have selected are by far the most advantageous for North Tyneside. They will enable the council to invest in services, safeguard employee jobs and deliver further growth and investment for the borough, as well as achieve the stringent efficient targets we have set.”