posted on Feb 10, 2014 by NelsonHall Analyst
The new deal between Hartlepool Council and Northgate Public Services (PS) shows how old-style local authority partnership contracts can evolve. This, is a low risk deal for Hartlepool Council, unlike other local authority partnerships of yester-year that failed to deliver. For a start, Northgate has provided the Council’s IT services since 2001 and it has already established a presence at the new Northgate Regional Business Centre (Northgate House) with the Hartlepool IT team already present within the building. Northgate PS is committed to growing the services that it delivers from there and has a signed pipeline, e.g. the HGV levy contract, for the headcount increase to happen. In addition, the council is to get £2m invested in its ICT and have guaranteed apprenticeships, on top of the typical 20% cost savings. Another aspect is that the council gets a three year FM deal and a seven year lease for the building, resulting in an income of ~£2.4m.
The terms of the contract require Northgate to:
- Modernize the ICT including desktops and servers
- Extend its regional business center, Northgate House, in Hartlepool to increase its workforce from 235 to 300
- Set up the new Northgate Academy, in conjunction with Hartlepool College of Further Education to offer up to 35 IT modern apprenticeships over the term of the contract
The partnership deal is to save the council >£1m a year.
The delivery center in Hartlepool is one of a number of key centers that Northgate PS is establishing to deliver shared services to the public sector. We understand that there will soon be 235 staff working on:
- Hartlepool Council’s IT contract
- Revenue and benefits services for a number of local authorities
- The Blue Badge improvement scheme for the DfT
- Welfare funds administration for ~nine local authorities in England.
We expect some consolidation of Northgate PS non-strategic delivery centers as the company focuses on establishing the four key centers.
NelsonHall will be publishing Northgate PS' public sector shared services BPO vendor assessment very soon.
NelsonHall's Global Public Sector Shared Services BPO Market Report and vendor positioning, NEAT, will be published in March 2014.