The company responsible for running London's congestion charging scheme has won a £424 million contract to transform the way Birmingham City Council conducts its business.
Capita Group, which will be given exclusive rights to supply the council's ICT infrastructure, says it can deliver £1 billion of savings to the local authority over ten years.
The company, which also collects the BBC licence fee and has its headquarters in Coventry, will have a controlling interest in a council joint venture company to be called Service Birmingham.
Five per cent of the company's profits will be placed in a staff trust.
The council cabinet will formally award the contract on M onday, signalling the secondment of 500 employees to Capita.
Although Capita's prime role will be to turn the council's IT function into a "world class service", the company will also bid for projects to change working methods and make the council more efficient.
A cabinet report says Service Birmingham will deliver "innovation and blue-sky thinking".
The report adds: "Service Birmingham will support the council in becoming an organ-isation in which transformational change is welcomed, embraced, supported and above all, able to deliver to the benefit of the city, its communities, citizens it supports and the people it employs."
Capita, which beat IBM to get the contract, has promised to create at least 800 jobs in Birmingham outside of the joint venture company within seven years.
When announcing Capita as its preferred partner at the end of last year, the council made it clear there would be wholesale changes in working methods. Staff would have to embrace a culture change which could mean being retrained for different jobs.
The agreement with Capita will give the council golden share rights, enabling it to terminate the contract under certain conditions. These include any attempt by Service Birmingham to relocate outside of Birmingham, creation of subsidiary companies and the buying or selling of shareholdings.
Capita's involvement will help the council cut costs by £137 million in three years - a target set out in the Govern-ment's Gershon review of local authority spending.
Deputy council leader Paul Tilsley said yesterday that C apita would provide resources to accelerate the successful delivery of the business transformation plan.
Coun Tilsley (Lib Dem Sheldon) added: "The council needs to make best use of modern technology to support its business processes.
"We have an exciting vision on how to deliver services to the people of Birmingham in the future. The joint venture company will provide new skills and additional capacity to help deliver the improved services."
Council staff seconded to Service Birmingham will retain their existing terms and conditions of employment and local government pension rights.