Chesterfield lays out pioneering outsourcing deal

Chesterfield Borough Councilhas released details of what may be a truly pioneering outsourcing deal by a UK council.

"Unitary and metropolitan councils have been the leaders in this level of outsourcing partnership," Rowena Hilton, deputy chief executive of the authority, told PublicTechnology.net. The council inked a £40m, ten-year deal with a consortium led by supplier Arvato last October which it predicts will deliver at least £500,000 per year savings, or a £4m total over the lifetime of the contract.

The deal covers a wide range of services, ranging from ICT, customer services, human resources, revenues, benefits, payroll, accounts payable, invoice processing, engineering and facilities maintenance and asset management.

In effect, Chesterfield has been left with a few key finance functions under direct control.

As part of the contract, around 200 of its 1,000 headcount have transferred to the outsourcers (Arvato and a building services specialist Kier).

Hilton says that the deal is the best way to deal with shrinking budgets while maintaining quality of services and also represents best value for money, pointing out that apart from the savings the partner has committed to invest £1.7m in new technology and infrastructure.

This investment also includes the refurbishment of facilities at Revenues Hall to create a modern customer service centre.

"Our stance in Chesterfield is to innovatively look at new ways of improving service delivery by both finding efficiencies and protecting and securing jobs," added the council's leader, Ray Russell.

Arvato says that in addition to "transforming the quality of services," it will also "make considerable cost reductions through increased efficiency, helping the Council to meet the large budget cuts that all local authorities are currently facing".

The supplier has similar deals with Sefton Metropolitan Borough Council in Merseyside (another ten year deal) and it has two years to run on an eight-year arrangement with East Riding of Yorkshire Council.

Hilton says that this scale of outsourcing is unusual in the public sector, but that the relationship between Chesterfield and the outsourcer is genuinely so strong that she has few doubts that it will deliver real value to citizens.

"Within the first seven months alone, we've seen new performance management systems come in, we've updated our Agresso ERP platform, 25 interesting ICT projects have been identified for us and we're looking to offer electronic payment options for our residents much quicker than we'd be able to do otherwise," she said.

"This is bringing Chesterfield into the 21st century."