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Capita contract review delayed again as threat to Sir Albert Bore’s council leadership begins to look serious

Capita contract review delayed again as threat to Sir Albert Bore’s council leadership begins to look serious

🕔10.Apr 2014

Publication of a review into the future of the Capita-Service Birmingham contract has been delayed again and will not now happen until a city council cabinet meeting on June 16.

The document, originally promised for February, is expected to recommend whether the council should continue to pay Capita about £100 million a year as the sole provider of IT services, or get out of the contract and appoint another company.

As a result of the latest delay, publication will move beyond the local government elections on May 22 and, significantly, a fortnight after the annual meeting of Labour councillors, when city leader Sir Albert Bore is likely to be challenged by backbencher John Clancy.

The Capita contract is a touchstone issue for Cllr Clancy and his supporters, who insist the council is overpaying Service Birmingham and that IT services, running the call centre and organising the local authority pay roll could be done more efficiently and cheaply by a consortium of local firms.

A council spokeswoman said there was “no obvious reason” for the delay, but also stressed that the review has been subject to intense and lengthy legal scrutiny by both Capita and the council.

Service Birmingham has received more than £1 billion from the council since the joint venture company came into existence in 2006. The current contract runs until 2020.

In 2012, the last year for which figures are available, the council paid Service Birmingham £126 million, or £345,000 a day. Since then negotiations with Capita are believed to have reduced the annual cost to less than £100 million.

The Service Birmingham review is not the only controversial report to have been shifted to the other side of the council elections. Chamberlain Files understands that the results of Ofsted’s unannounced inspection of Birmingham children’s social services are unlikely to be published until the end of May.

The latest delay comes amid growing signs of unease among Sir Albert’s supporters who fear that a combination of ‘bad news events’ may swing support behind Cllr Clancy.

Issues swirling around the Council House at the moment include the future of children’s social services, now effectively in the hands of a Government-appointed commissioner, as well as the Trojan Horse allegations of Muslim extremists infiltrating city schools.

On top of that, the unexpected defeat suffered by Labour at the Kingstanding by-election in February has further unsettled backbench councillors already battered by the impact of public spending cuts this year of almost £100 million.

Cllr Clancy stood for the leadership last year and managed to secure 23 votes to 51 for Sir Albert.

He will go into this year’s campaign with a comprehensive manifesto which is expected to propose moving from the leader-cabinet system of governance to a new version of the old committee system. Clancy says his proposal will bring many more members of the Labour group into meaningful roles, spreading responsibility for running Birmingham to a far wider field than the existing eight-person cabinet.

Chamberlain Files understands that Sir Albert’s closest allies believe Cllr Clancy will secure at least 30 votes at this year’s leadership election.

However, if Labour does well at the council elections on May 22 Clancy’s support could rise since it is thought most of the candidates in winnable seats are likely to vote for him.

Should Cllr Clancy secure more than 30 votes it is likely Sir Albert, who has been Labour leader for 15 years, will be urged by friends to plan an exit strategy for 2016, or even 2015, rather than face the ignominy of defeat. The most likely successor is thought to be deputy council leader Ian Ward.

A Labour source close to the Bore camp said: “Last year we expected Clancy to get about 13 votes. In the end he got 23, which was a real shock.

“We think it’s likely now that Clancy will hit 30 votes this year, although the figure could be higher than that. Anything could happen, really.”

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