Crucial vote sees Glasgow agree to privatise all council IT services

A massive ideological shift for Labour-run Glasgow, the move means attempts to keep IT services in-house are dead in the water, with the authority dedicating £750,000 to pursuing a business case with a Canadian multi-national.

The council's decision-making executive committee voted nine to seven in favour of privatising the service, which will see everything from IT in schools and social work departments through to payroll run by an outside company.

All Labour members of the committee voted in favour, with the Greens and SNP opposing. The opposition groups had wanted more detail and options provided to them.

The decision is expected to make a strike by the council's IT staff more likely, with the outcome of an ongoing ballot due next week.

Unions have been promoting an alternative business case based on keeping it in-house. IT within the wider city council is provided by an operation called Access, a joint venture between the authority and services giant Serco.

Montreal-based CGI, which runs Edinburgh and Borders Council IT, as well as several Scottish Government contracts, is the front runner.

The decision is likely to see a raft of other Scottish councils and public sector bodies taking on the firm, such as the nature of the deal with Edinburgh.

Following Thursday's meeting leader of the council's SNP group, Susan Aitken, said: "We entered this process with an open mind but also extremely conscious that we were being asked to make a huge decision, namely to privatise a council service and transfer council family staff to a private sector company.

"It was made clear by officers today that, if the paper was approved, then an in-house option is off the table and that the service will be privatised, either with CGI or another private company.

"We listened carefully, but we were not satisfied that enough consideration has been given to the merits or otherwise of an in-house service or another joint venture to allow us to permanently rule those options out."

Dr Martin Bartos, co-convenor of the Greens on the city council, added: "The city council's administration today seems to be determined to journey into the quagmire of procuring public ICT provision wholly from the private sector. Many have entered that swamp, few return happy. "The terrain is complex and we have yet to see what course is tread, but Greens and SNP today called for more work mapping out our options before we headed down this risky path. Turning down that request may prove costly."

The move comes on the back of a row between unions, the council and CGI over letters to staff last week. On top of promises over job security and maintaining terms and conditions, CGI has told IT staff they can become shareholders of the Montreal-based firm if the deal goes through.

But unions are livid that CGI, which has been implicated in the US Obamacare IT fiasco and the debacle over EU subsidy payments to Scots farmers, had been allowed to communicate directly with staff and offer shares in the company as inducements to accepting their takeover.

Councillor Frank McAveety said: “We’ve been clear all along that the work done so far on the Strategic Business Case for future IT provision showed that continuing with external provision was the best solution. That involves both the development of the Council’s IT services and future services for the benefit of the citizens of Glasgow.”

“The business case identified that the continuation of an external provider would cost up to £100m less than what might be delivered by an in-house contract.”

“The report that went before councillors on Thursday was also clear that the business case they were being asked to approve would examine the CGI contract arrangement put in place by City of Edinburgh Council. It also states that should that contract prove unsuitable then further diligence would involve investigation of other external provider options."