business

New Service Birmingham chief vows 'to reset' relationship with council

Tony Lubman keen to build bridges after several difficult years in which city council's relationship with its IT contractor has deteriorated

The new chief executive of Service Birmingham has vowed to reset its relationship with Birmingham City Council following claims it was just a "cash cow" for parent company Capita.

Experienced local government operator Tony Lubman has been brought in after several difficult years in which Birmingham City Council's relationship with its IT contractor had deteriorated to the extent that it had become "contractual" and there was an "us and them" attitude between the two.

Mr Lubman, the regional operations director for Capita Local Government Services, replaced Stewart Wren as Service Birmingham chief executive last month.

And he has pledged the company will behave more like the council's IT department and help the organisation achieve further savings following major budget cuts.

Mr Lubman appeared alongside council deputy leader Ian Ward before members of the governance and resources scrutiny committee whose inquiry two years ago revealed tensions between the organisation.

Committee member Coun Mike Leddy (Lab Brandwood) referred to 2011 when Service Birmingham took £120 million worth of business from the city council at a time when austerity budgets were beginning to bite.

He said: "The opinion has been that Birmingham City Council has been seen as a cash cow by Capita. I am one of the sceptics, I don't feel that Service Birmingham has been a good partner, I need convincing that this is changing."

He wanted to see evidence Service Birmingham was cutting its costs to match the reductions in council budgets and staff.

Controversial elements had been high charges for IT services and charges by volume for complaints to the call centre. There was also mutual suspicion between the two organisations.

The council even recently looked into the costs of cancelling the deal, which runs until 2020, but has now opted for this refresh of the relationship.

The committee was told the contract had been much reduced since the 2011 high point due to the number of one-off projects being cut back, the call centre going back in-house last year and a £20 million reduction negotiated in the 2015/16 budget.

A further £12.5 million reduction has already been agreed over the following three years. Mr Lubman and Coun Ward said the relationship would be reset.

They agreed there had been a partnership during the business transformation era up to 2010 during which the local authority's IT and communications systems were upgraded to meet 21st century demands in order to make massive efficiency savings.

Coun Ward said: "We had the partnership right, it worked well and we achieved significant savings, but then it became this contractual relationship."

Service Birmingham, as the council's IT contractor until 2020, would from now on behave more like department of the council than a contractor.

Mr Lubman said: "If we remained in that contractual environment then we will not get the best out of Service Birmingham."

Referring to the budget cuts in the pipeline, he said: "The council has a huge financial challenges ahead. We need to deliver savings and improvements."

Mr Lubman and his staff will now be sitting at the council's top management table to ensure that IT solutions are considered to help the council achieve its major budget savings.

Capita, for whom Birmingham City Council remains one of its major local government contracts, has also pledged to offer the city the best advice and expertise from other parts of the country, to make further efficiency savings.

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