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Essex County Council to hand highways procurement to IBM

Essex County Council is to shake up its highway management and other procurement strategies after awarding a major performance review contract to IT giant IBM.

The deal, which was signed in December, could be worth as much as £5.4bn over eight years but depends on IBM proving it can make major cost savings in a range of areas.

“It is a very flexible contract with very little commitment [for the authority]. We have not let the maximum contract on day one. It is being let as a series of business cases,” said Essex County Council finance director Nick Bell.

Initially the council has asked IBM to develop business cases for three projects for procurement, IT and back office services.

“These are the areas we know we need to make improvement in, particularly procurement,” said Bell. “We spend £800M per year on everything from goods and services to highways, construction and social services.

“IBM will review everything and bring in modern approaches from the private sector.”

Essex County Council finance director Nick Bell

“IBM will review everything and bring in modern approaches from the private sector.”

If the company demonstrates that it can make significant cost savings, the council may opt to hand it procurement of all of its services. “Ultimately it is about getting best value for money,” said Bell.

Waste management is another priority area for Essex, which has recently submitted business case proposals to the Department for the Environment, Food and Rural Affairs. It has not ruled out using a PFI concession.

“We have made no definitive decisions on our approach yet but we are looking for IBM to bring in its knowledge of international strategies and input new ideas,” said Bell.

According to Bell, other councils are being encouraged to work with Essex to share benefits found by IBM. “Findings will be open to all of our partners in the public sector,” he said.

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