THE ground-breaking £10 million-a-year outsourcing deal between Blackburn with Darwen borough and private firm Capita is to be reviewed and re-negotiated, senior councillors will be told tonight.

The council’s executive board will be asked to approve the formal termination of the contract, worth over £200 million over its 15 years.


It is due to run out on June 30, 2016.

In a report borough chief executive Harry Catherall tells the executive board the borough is required to give formal notice of the termination of the contact no later than 12 months before its end date.

This allows the council to review the terms of the contract and renegotiate which services are outsourced and the cost of doing so as it seeks to save £31 million from its budget over the three years from 2015 to 2018.

In June 2001 when the contract was signed hundreds of staff were transferred from the borough to Capita’s offices in Blackburn and Darwen, with the private firm being paid £12 million a year.

In July 2012, changes to the deal saw payroll and personnel services taken back into the town hall.

It saw salary payment and human resources functions for its 2,800 staff brought in-house and the annual payment reduced to £9 million.

Although the council had to pay more than £500,000 for IT equipment, licences and software from Capita, it persuaded the firm to waive any termination charges.

Other services involved in the 2001 deal included revenues and benefits, social services administration, print and design, highways and transport, architecture and technical services. property management and maintenance, and debt collection and accounting.

Mr Catherall said: “The council’s view on partnerships is that we are open to all opportunities and will consider working with anybody who can clearly demonstrate that they can change things for the better. “The 15-year contract with Capita was certainly ground-breaking. It focussed on economic regeneration and all the original targets have been met. It has been regularly reviewed with a focus on the strengths and weaknesses.

“This is happening again now that the current arrangements are due to the end in June 2016.”

A Capita spokesman declined to add anything to his statement.

The report to the executive board says: “Key strategic objectives for the partnership focusses on economic regeneration in the borough and job creation. Capita have exceeded these targets.”