BT has announced the award of a ten-year £400m IT and BPO shared service with Lancashire County Council worth around £400m, covering ICT for the county council and local schools, plus human resources, payroll, customer services and procurement. BT and Lancashire will create a private limited company called One Connect Limited, which will be a subsidiary of BT, in which Lancashire will have a 40% stake and BT 60%. Around 800 people will be transferred in to One Connect Ltd, and BT has committed to make savings of £100m over the next ten years through “faster deployment of technology and new systems”.
This is a major win for BT, and the first local government mega-deal we have seen for some time, significantly dwarfing the £150m win by Mouchel at Bournemouth Council in November (see Mouchel secures Bournemouth deal). It confirms our view that the local government market is picking up steam.