One of Birmingham City Council’s largest contractors Capita has announced that it delivered on its pledge to create at least 720 jobs by 2013.

The commitment was made when it signed the Service Birmingham contract 2006 and eventually took over the council’s IT, call centre and revenue collection services.

The contract has been heavily criticised by some councillors for being too costly at a time of austerity cuts.

As a result, the council has negotiated a cut of at least £20 million a year from the core IT contract, which is believed to cost between £50 million and £60 million a year.

But now Capita has announced that it employs 737 people in addition to the Service Birmingham contract, as well as developing 22 IT apprentices from some of Birmingham’s poorest backgrounds since 2008.

Service Birmingham chief executive Stewart Wren said: “Service Birmingham is wholly committed to creating jobs and supporting growth in the Birmingham economy.

“Not only have we met our jobs target, we have actively supported young people on their road to employment with our successful apprenticeship programme.

“We will continue to build on this good work to help create employment in Birmingham.”

Defenders of the Service Birmingham deal say the transformation of the council’s IT and communications has saved the council far more than it spent on the contract.

Council chief executive Stephen Hughes added: “Our partnership with Capita has not only supported the council’s transformation and helped reduce service costs, it is creating jobs in the city and apprenticeships for our young workforce, which remains the council’s highest priority.”

In January, Service Birmingham had to apologise after it took two payments instead of one from 3,447 council taxpayers and business ratepayers.  The mistake was blamed on computer error.