Welwyn Council to save millions with £31m outsourcing deal

Welwyn Hatfield Borough Council has signed a 12-year, £31m contract with outsourcer Steria in a deal that could open the way for a shared services scheme between local councils.

From next January, Steria will take over the provision of ICT, council tax, benefits, customer contact centre, reception and switchboard services from the council in a contract that the local authority expects will save it £500,000 per year over the life of the contract.

However, cost savings weren't the most important factor in choosing a supplier, according to Bob Jewel, Welwyn Hatfield's procurement officer.

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"In the final analysis, 60 per cent of our evaluation was based on quality, 40 per cent on cost. What we were trying to ensure was that we maintain the quality of service to the community. For example, that we actually paid out benefits claims in the same length of time or lesser length of time than what we were doing already. We didn't want to see a deterioration of service - that was very important. We weighted our decision towards service rather than cost," he told silicon.com.

Under the deal, 68 council jobs will be moved from the council to Steria - a move that was welcomed by staff, Jewel said.

No job losses will occur as a result of the deal and transferred staff will remain in the same office, which will be designated as a 'centre of excellence' which could go on to form the basis for shared services across other local authorities in Hertfordshire.

"All councils to some extent do the same sort of services just for their geographical area… there is quite a lot of potential synergies in bringing together two, three or four councils or even more to work as a larger unit. From that, there could be additional cost savings and almost certainly would be, both in terms of staff, IT, services and accommodation," he said.

Both the council and Steria will be looking to take the shared services centre live in the future with the first steps in the process potentially taken from next year.

"If you've got a vehicle and a company like Steria underlining it, then obviously you can work with them to provide [services] to a wider community. Sometimes it's more difficult for councils to work with another council without having a vehicle to work through," Jewel added.