There was a genuine buzz of anticipation around the corridors of the Council House this week as it became common knowledge that potential successors to chief executive Stephen Hughes were being interviewed.

The interview panel, which included council leader Sir Albert Bore and chairman of the HR committee Muhammad Afzal, was convened to grill candidates.

Rumour has it that two have been shortlisted for the £180,000-a-year role in the scaled down management structure, and both are external candidates.

Stephen Hughes is due to retire in February – or perhaps later if the search for his successor drags on – and a signature policy under his stewardship has been the Capita Service Birmingham contract.

Now it appears that all this great work to transform the council from the archaic network of shabby offices into a streamlined hi-tech 21st century organisation worthy of the largest local authority in Europe could be undone.

It was publicly admitted for the first time that council officers have been asked to work out the cost of cancelling the Service Birmingham IT and call centre contracts.

Deputy leader Ian Ward confirmed he has asked for a detailed breakdown of how much cancellation would cost and how much the council would need to spend until 2020 on an in-house IT and call centre service.

Of course there is massive complexity around this with the core IT contract, worth between £50m and £60m a year, plus extra contracts for the call centre, one off projects, deals with schools and council tax collection services bringing total annual outgoings to Capita to £120 million last year.

These figures are frequently confused with calendar and financial year numbers, with or without tax, and by different definitions of the ‘contract’.

Of course asking for the breakdown of cancellation fees does not mean that the Labour administration is dead set on this – and it has widely been commented that it is a negotiating pitch to ensure Capita agree to the proposed £20 million a year cut in their deal with as little fuss as possible. However, if the costs are as far out of kilter as critics suggest then surely the research will back this up and make cancellation inevitable.

Another voice in the debate surrounding this has been Lib Dem leader Paul Tilsley, who oversaw the contract as deputy leader until 2012.

He has reminded us that business transformation is now racking up savings to the council of about £93 million a year which cumulatively makes a huge dent on those scary jaws of doom.

The trouble is this confuses criticism of costs associated with the ongoing costs of the core Service Birmingham Contract with the Business Transformation project, which has largely ended.

BT, as it was known, was a no-brainer. A network of 50-odd council offices, many in old buildings, understaffed with huge running costs was cut right down to about 15.

Staffing has been cut over that time from more than 20,000 to nearer 14,000. The numerous council phone lines which filled several pages in the phone book have been turned into a single contact centre.

A network of 40 neighbourhood offices, where people were spoken to face-to-face about housing repairs, deal with council tax and other problems have been drastically culled and replaced with the call centre and website information.

Meanwhile, a unified IT system, replacing departmental systems, means that a better grip is kept on invoices, outgoings, incomings, staff attendance and performance information is available at the touch of a button.

This is the easy stuff. What is most surprising about this is not that it is saving £93 million a year. It’s that it took Birmingham City Council until 2006 to get moving on it.

And the killer question is how much more would have been saved if the website had not gone five times over budget or the council was not charged £7,000 for a single computer.


A traditional non-aggression pact between the parties in Birmingham came within a hair’s breath of being breached at the council’s Cabinet this week when Tory deputy leader Robert Alden tried to challenge Labour over its reform of the children’s social care department.

He tried to point out that the former Tory administration had focused on the department with dedicated cabinet members and a scrutiny committee and that Government criticism over weak leadership only applied after 2012 when Labour took over.

He then suggested the council was almost begging the Government or an outside agency to take the troubled department over.

But Labour leader Sir Albert Bore slapped down the young upstart by pointing out the department has been in crisis for five years and that: “I’m not going to take the gloves off, although you are inviting me too. But I warn you to be very careful about your comments as they might come back to bite you.”