The Essex County council has announced that it will be outsourcing a huge chunk of its services to IT solutions giant IBM in a £5.4 billion deal.
The company was named as the preferred bidder for the multi-billion pound contract and was named the winner in early December.
Lord Hanningfield, leader of Essex Council said that "IBM has demonstrated its ability to help us deliver our vision of providing the very best quality of service for our residents."
An IBM solution, which will help the council cut its annual £1.2 billion budget by 20 per cent within the next three years, will have IBM analysts handling some of the services which the council provides to the citizens of Essex County.
A decision will be also need to be taken on whether to outsource particular service - like school management, libraries, road - or to keep it "in house".
Apparently, the council took the decision of awarding IBM with the contract by looking at the company’s success in similar projects in Canada.
However, the company’s past record of handling council services is far from being good as the SAP project for the Somerset Council has been suffering from problems ever since it went online.
The recession has exposed how public and private sectors are similar. Huge bonuses and salaries are present on both sides. IBM will have to make sure that it doesn't pare council services to the bone and damages not only core services but also, at the same time, its reputation.