Jobs will be axed when Sandwell Council exits a £300 million contract with BT, it was confirmed today.
The authority is to leave its planned 15-year partnership with BT called Transform Sandwell nine years early after bosses said they were unhappy with the service.
Around 300 employees are due to return to work for the council but council leader Darren Cooper said it was ‘inevitable’ some posts would be shed in the move.
The deal was signed in 2007, and saw the council pay £15 million a year to BT for the management of services including finance, customer contact and communication.
But last July the authority told the telecommunications giant it wanted to bring its contract to an end, unless BT addressed issues raised by the council within 30 days.
The disagreement could not be resolved and both parties have begun to draw up an exit plan to end their contract by March.
Councillor Cooper said: “There will be some job losses, there is no doubt about that. There is lots of duplication between what the council does and what Transform Sandwell have been doing, but obviously what we will try and do is minimise those like we have been doing with everything else.
“We are in a time of massive austerity – inevitably people are going to lose their jobs, but we are going to try and minimise the impact of that in staff coming back and staff in the council.”
It is forecast that the return of Transform Sandwell will see efficiency savings of approximately £2.5m in the 2015/16 financial year. A report which will be discussed at a meeting of the borough’s full council tomorrow states that the reintegration of returning services from Transform Sandwell is likely to take around 12 months to complete from the date services return to the authority.
It is also proposed that the deputy chief of the council, John Garrett, leads a root-and-branch review of the structure, management, operation and future development of the three central support directorates of the council, which it is forecast will increase the annual saving forecast to be around £4.5m from April 2016 onwards.
Councillor Cooper added: “The initial savings will come from pure efficiency, not from jobs and we estimate that to be around £3-4m over the first couple of years.”
The council’s ruling cabinet had decided to end the BT contract because it now has fewer workers due to redundancies prompted by government cuts.
The authority wanted to pay BT less to reflect the reduced volume of work.