The council has served HBS with one month’s notice to terminate earlier this month, citing breach of contract. The council had become dissatisfied with the level of services from HBS, particularly following an unfavorable Corporate Performance Assessment report. Unless HBS improves services within the one-month notice period, the partnership will be dissolved and all services, staff and assets will revert back to council control.
The original deal was signed in June 2001, and involved the transfer of approximately 500 council employees to HBS. Areas covered under the agreement included human resources, IT services, customer contact center, and education and development services.
Milton Keynes, UK-based HBS has around 3,500 staff at offices across the UK. Total revenue in 2004 was approximately GBP150m ($261.9m), up about 20% on the previous year. The company has public private partnerships with UK local authorities, including Lincolnshire County Council, Middlesbrough Borough Council, and Milton Keynes Council.
In December 2003, Northamptonshire County Council ended negotiations with HBS over a 10-year contract worth an initial GBP766m ($1.3bn), citing an unbridgeable financial gap between the expectations of both organizations.
