Essex confirms £5bn IBM outsourcing deal

Essex County Council has confirmed an eight-year partnering deal with IBM to outsource some of its back office and customer-focused services. This will include the modernisation and streamlining of the council's back office function, improving its customer website and streamlining of Essex's procurement processes.

Following cabinet approval on 1 December, the contract will be formerly signed in mid-December covering an initial period of eight years, with break causes included. The council said that the partnership will be “led and governed” by Essex County Council at all times. IBM would be able to bring expertise, additional capacity and resource to assist ECC in delivering its objectives, it added in a statement. IBM was selected as the preferred partner in June this year.

“This is the most ambitious project that the Council has undertaken, and finding the right partner to help us deliver it is a vitally important step,” said the leader of Essex County Council, Lord Hanningfield.

“IBM has demonstrated its ability to help us deliver our vision of providing the very best quality of service for our residents. With the additional capacity, capability and skills that IBM will provide we are now looking forward to working with them as we move towards a more efficient, customer-focused organisation, providing first class front-line services. Working together we will also be able to keep council tax low and deliver real value for money for Essex residents.”

Essex County Council estimates that the final value of the contract will be in excess of £5bn, but the contract signed, however, is on a much smaller scale than the proposal at the end of last year, which envisaged that the majority of council services would be outsourced to private sector providers, with the process being managed by a single strategic partner.

Nevertheless, the move will anger local government union members who believe the aim to create a ‘lean’ system will mean redundancies and disruption for council employees. In September, when it was already clear that IBM would win the contract, UNISON said it was “opposed to the whole project and will continue to do what it can to stop it”.