London’s Tower Hamlets Council has outsourced its ICT operations to Agilisys on condition that the vendor sets up a new Apprenticeships Institute to provide young people with opportunities in the deprived borough.
The seven-year deal, which is worth £70 million, was signed in a bid to help the local authority make £100 million-worth of cuts over the next four years.
The contract is expected to deliver more than £29 million in ICT cost savings and will result in the provider introducing new HR and finance systems as well as supporting the council’s wider transformation programme.
ICT operations will be based in Tower Hamlets itself and the local authority’s IT staff will be transferred to the company for the duration of the deal – a no compulsory redundancy guarantee has been included in the arrangement.
The Institute will likewise be based in Tower Hamlets and will be pitched as a centre of excellence for training and developing hundreds of apprentices and placing them with public, private and third sector employers.
Chris Naylor, corporate director of resources at Tower Hamlets, said: “This council needs to make savings of £100 million over the four years to 2014/15 and we are working hard to deliver these savings, while protecting frontline services and the jobs of our workforce. Through this innovative partnership we will not only deliver millions of pounds worth of savings, but we will create hundreds of job and training opportunities for local residents at a time when they are most needed.”
The job creation aspect of the arrangement is a good example of tying innovation to pragmatic contractual elements, according to Georgina O’Toole, an analyst at research firm TechMarketView.
“In this competition, the council made clear that it was expecting its supplier to ‘deliver the authority’s vision for job creation and skills development’ as well as operating the council’s ICT service,” she said. “In other bids, offering the right sort of innovation requires a bit more reading between the lines.”
