ABOUT 500 white collar jobs are planned for Blackburn after the council signed a deal with private company Capita to take over the running of some services.

Local government reporter LIAM MURPHY takes a closer look at how the deal will work and assesses how an influx of office jobs is expected to affect the town...

BLACKBURN with Darwen Council is hoping its partnership with Capita will prove a lucrative business deal as well as boosting employment and helping town centre regeneration.

The agreement, which will mean 500 new white collar office jobs over the next five years and a £5million investment in a state of the art business centre, will also mean a possible source of income to the council.

The deal has been hailed as good news by all three local political parties and Home Secretary Jack Straw also welcomed the partnership which he said would bring Blackburn "out of Preston's shadow".

The Blackburn MP added: "It's particularly important because it involves new jobs for white collar workers. This will help balance the economy in the area."

Asked whether he had any worries about handing council workers to the private sector, Mr Straw said: "I don't have any concerns about that. Experience has shown that this kind of partnership does work."

From May 1, the transfer of up to 500 council officers to become Capita employees will begin, but the FTSE100 company is also hoping to use the centre to support and expand its North West operations.

Rod Aldridge, executive chairman of Capita, said the partnership with Blackburn with Darwen Council would result in a major business centre based in Blackburn and serving Greater Manchester, Liverpool and Lancashire.

The company currently has around 2,000 employees in the North West's two main cities and the Blackburn centre will provide back office support for the work carried out there. But Capita and council chiefs also stressed the deal would improve council services as departments including housing benefits, personnel and payroll services, property management, architecture and civil engineering and digital technology are taken over by the company which already has deals with 350 authorities across the country.

Mr Aldridge said: "There will be an enhancement in the services provided and how they are delivered, and the technology used. There will also be some savings in terms of cost. We will also bring investment into the partnership, as well as added jobs."

He said: "There is a massive opportunity for staff with this agreement because we are a company that is growing very fast."

Phil Watson, chief executive of Blackburn with Darwen Council, said: "Staff are very positive about this. Many of the staff are keen because they can see their career prospects with the council were restricted in what we can do. This expands their job opportunities."

The lower wage economy in Blackburn is also an attraction for Capita. The average wage in the borough is 82 per cent of the national average.

Capita's divisional director admitted this was part of the attraction and described the borough is "a stable low cost area" but Capita would be creating "professional well paid jobs". He said: "The cost of development is low compared to the South East of England." Rod Aldridge said Capita had wanted to come to Blackburn with Darwen because he liked "the way the authority go about their business". He said: "It's a great area to build a business centre, and we have got access to the surrounding area including access to Manchester."

The company is planning to invest £5million in a state of the art business centre in Blackburn town centre and has identified possible sites for it, which is expected to be completed within two years.

Mr Watson said the council would benefit from work Capita got from nearby sources.

He said: "What we have agreed is that any work which is secured in Greater Manchester and Lancashire, the town will benefit from it. We will get a share of any increases which come from this region."

He said Capita would benefit from Blackburn with Darwen Council's position within Lancashire and the North West and its links with other local authorities and businesses.

Mr Watson added: "We have good links with Greater Manchester and Lancashire and private businesses through the Blackburn Partnership. Capita came to us because of these good links we have throughout the North West."

He said the exact details of this arrangement were still being "fleshed out", but added: "It's a ground-breaking partnership and has been held up as a model for the way forward for local government."

Tomorrow: How accountable will Capita be?