South Tyneside Council:

Covering 25 square miles, South Tyneside is the smallest metropolitan borough council in England and Wales. Once globally renowned for shipbuilding, coal mining, and heavy engineering, it experienced industrial decline in the 1970s and 1980s. Today, the Council has strong socio-economic regeneration ambitions. For example, its old factories and shipyards are being replaced with world-class business premises to bring new employment to the area. What’s now being referred to as north-shoring is just one of many South Tyneside strategies.

Has the gloom of swingeing cuts in public sector expenditure dimmed that vision? Martin Swales, CEO at South Tyneside Council, has this to say: “Of all the 353 Councils in the country, South Tyneside is arguably the hardest hit and has never before had to find savings anywhere near this magnitude. Alongside these financial pressures, we face rising demand for our services. This means that, in effect, we must strive to do better with less. In this new climate, we have an unshakeable vision for South Tyneside to be a great place to live, work, visit and do business, with economic regeneration at the heart of our plans so that we improve prosperity for our communities.”

The story of the BT South Tyneside partnership makes good reading against that background. A genuine public private partnership – attracting inward investment and creating jobs while reducing service delivery costs – it could be the light at the end of what might for many be a very long tunnel.

Already considered one of England’s best-performing local authorities, South Tyneside Council was looking to further improve public services. It sought a long-term partner to support those efforts, while helping drive regeneration. Martin Swales explains: “We were looking for a partner to help drive the long term strategic priorities of South Tyneside. With a proven track record, we chose BT to help improve economic prosperity, generate significantly more jobs and locate BT’s Local Government operations in the borough, kick-starting our major regeneration of the South Shields riverside.”

A 10-year contract between BT and South Tyneside Council, under which the partnership would provide a wide range of business services, was signed in 2008. Those services include ICT, contact and walk in centres, financial services, procurement, human resources and payroll, and revenues and benefits.

Councillor Iain Malcolm, Leader of South Tyneside Council, said at the time the partnership was launched: “This is a massive coup for the council. BT is a global brand. Its arrival has elevated South Tyneside’s profile on an international scale. The ultimate objective is to create a knowledge economy in the area. This would not be possible without the support of BT.”

In recognition of the venture, BT created a new wholly owned subsidiary – BT South Tyneside Limited – committing to invest around £23 million in service transformation and business process outsourcing over the lifetime of the contract. Some 450 council workers have transferred to the new company, with full protection of terms and conditions, as well as the opportunity for enhanced career development.

Margie Burdis, CEO of BT South Tyneside Limited, says: “South Tyneside Council is a visionary local authority with a four-star service rating, and BT is proud to be helping it to improve further on that status.” BT has committed to deliver a three per cent year-on-year reduction in service charges for the first five years, plus procurements savings of £16 million. To assure continuous improvement, performance indicators have been agreed covering a wide range of services.

As a demonstration of the reciprocal nature of the relationship, BT has taken a long lease on a brand new office in South Shields – the jewel in the crown of the Council’s riverside development plans. The construction contract was signed on 16th July 2010. The office, which will accommodate up to 600 staff, will house a range of BT functions.

BT has also committed to create an average of 750 new jobs in the borough, over the 10-year lifetime of the contract. To this end the new office will form a BT centre of excellence for its local government operations, enabling the company to offer cost effective shared services to other public sector clients. Having BT as a prime tenant will help South Tyneside Council attract other businesses to the region, creating further employment opportunities and aiding the regeneration of the borough.

While still in its relative infancy, the partnership has already implemented changes to deliver efficiency gains and cost reduction. Significant customer service benefits are also being realised, such as much more efficient handling of housing benefit claims (see box). A number of external accreditations have been achieved, not least for the BT South Tyneside Limited Customer Contact Centre, which has been independently accredited against the Customer Contact Association’s Global Standard.

Martin Swales says: “BT’s credentials and financial strength are already improving the services delivered on behalf of the Council and BT is proving to be an excellent partner in South Tyneside.”

While performance indicators covering key services such as the Contact Centre and e-Services show a positive picture, the partnership is also making an impact on job creation in the region. By the end of Year 2 of the contract, BT and its partners had created 375 new jobs, comfortably ahead of the contractual target of 300. BT is also continuing to work with South Tyneside Council to attract other knowledge economy businesses to the region.

Alan Holt, Partnership Director at South Tyneside Council, says: “Two years in, the partnership has met or exceeded all service delivery and outcome focused targets. Despite the recession, job creation is now ahead of schedule, the business centre is under construction, and savings are being delivered as promised. Satisfaction among our transferred staff remains high.”

The stimulus to the South Tyneside economy is expected to be worth considerably more than £200 million over the partnership’s 10-year term, vitally important in this now cash-strapped sector.Alan Holt sums up: “As an already excellent Council, our standards were high. BT has shown that our outsourced services and staff are in safe hands and that they can be relied upon to deliver what they promise.”

The South Tyneside housing benefit claims handling procedure was quite complex and time consuming. Investigation revealed that customers often made mistakes and omissions when completing the multi-page application form, leading to delays in claims handling. To overcome this, a radical new process was designed by BT South Tyneside Limited.

A claimant now starts by picking up the phone, enabling the assessor to determine whether the case is likely to be valid. If it is, an appointment is offered for a face-to-face interview, during which the majority of the claim form is completed. The process is almost paperless. One letter is generated – to tell the customer of the outcome.

The transformation was completed in just three months including the enhancement of IT systems. Claims are now processed in an average of 3.4 days. When the need is urgent, the assessor can set next day as a target. Some are even dealt with on the same day. Calls from customers have plummeted. The number of appeals has been reduced by 30 per cent. Claimant satisfaction is an impressive 98 per cent.