UK - Norfolk County Council has cancelled a £50m pension administration deal with Capita Group less than half-way through the contract.
But the move is likely to cost the council millions of pounds through an early termination clause.
Norfolk County Council stressed it was happy with the service Capita had provided – although insiders point out that the leadership has changed from Labour to Conservative since the contract was agreed.
Finance director Bob Summers said: “We were happy with the service Capita provided, but there were wider issues on which we couldn’t agree.”
Capita was awarded the contract for exchequer, payroll, pensions and operational IT services in 1999.
But now the council is thought to be considering implementing a new “best of breed” strategy which could mean that some services will be contracted out to individual specialist providers.
However, the council stressed that all relevant administration staff at Capita would be switched back to the council payroll at the end of the year, pending a further review at a later date.
Capita executive director Simon Pilling, said: “It is clearly disappointing that Norfolk County Council has chosen to end this contract at this time, despite the extremely successful performance of our core contract and the services we provide locally.”
Norfolk County Council leader Alison King added: “Time has moved on since the contract was signed back in 1999 and our needs and priorities as an organisation have changed.”
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