Hundreds of BT staff to move back to South Tyneside Council

The decade-long shared service agreement launched between South Tyneside Council and the company will come to an end next year and will not be extended.

The authority has said the firm has decided to turn its attention to the technology side of its operations, while it said an offer from the company to extend the partnership of just its ICT services in isolation was not deemed to be of benefit.

The council has said there will be no job losses or gains in the departments, which cover the tasks of human resources and payroll, finance, corporate procurement, revenues and benefits, customer services and the ICT services.

It has not yet been determined where they will work.

The contract will end on October 1, with the 220 staff to be transferred back across to the council under Transfer of Undertakings (TUPE) regulations, with consultation to be carried out with the staff.

It had promised a 3% year-on-year reduction in service charges for the first five years of the deal as well as £16 million in procurement savings, with a long lease taken on a new office in South Shields highlighted as being the “jewel in the crown” of the council’s riverside development plans.

It accommodates approximately 600 workers for BT who carry out a series of roles, with the company also pledging to create an average of 750 jobs in South Tyneside over the lifetime of the contract and was projected to add more than £200 million to the area’s economy over its term.

Councillor Ed Malcolm, lead member for resources and innovation, said: “BT has taken the strategic decision to focus on their core technology business and we respect that.

“The offer from BT to extend the partnership on ICT services alone was not judged by the council to be in its best interests.

“Nevertheless, our partnership has been and continues to be a huge success since it started back in 2008 but due to BT’s changing business priorities, their delivery of council services will now cease at the end of its term.

“We will continue to work closely with our partners to create a smooth transition for staff affected.

“I’d like to reassure people that although a large part of our partnership with BT will come to an end in September 2018, staff whose main activity is to deliver services back to the council will simply return to the council at the end of the contract next year.”

At the time the deal, Coun Malcolm said the deal had been a “massive coup for the council” and would elevate the borough on an international scale.

The company created a subsidiary as part of the scheme, investing £23 million into “service transformation and business process outsourcing” over the period of the contract, as well as offer “enhanced career development” to workers.

A BT spokeswoman said: “BT’s current contract with South Tyneside Council is approaching its natural end, and as of the end of September 2018, services currently provided by BT such as HR, ICT and finance will be passed back to the council to be managed in-house.

“We do not anticipate job losses with relevant staff, most of whom originally worked for the council, transferring back to the Council.

“Both BT and the council remain committed to our strong partnership, which has delivered huge benefits to the borough over the past nine years, including the creation of nearly 700 South Tyneside jobs and efficiencies of around £10 million.

“Discussions between BT and the council are now in progress to ensure that any changes are carried out smoothly so that the citizens of South Tyneside continue to benefit from high quality services.”