£190 million IT contractors still to deliver promised 200 jobs

by OUR LOCAL GOVERNMENT EDITOR

Councillors in the Scottish Borders have been told in a report that CGI, the IT company awarded a £190 million contract by the local authority without competition has only delivered a fraction of the 200 highly skilled jobs promised when the deal was signed eight years ago.

The original outsourcing IT contract, worth £92 million and set to last for 13 years, was signed off by Scottish Borders Council and CGI in 2016. An upbeat statement declared the 200 jobs would be created by 2019 in a locally based delivery centre. The partnership was set to generate a potential gross value added of £107 million, it was claimed.

However, three years into the arrangement, only 71 staff were on the CGI payroll, more than forty of them previous employees of the council transferred under TUPE terms (Transfer of Undertakings Protection of Employment).

Then, in October 2020, SBC announced the contract with their IT providers was being extended until 2040, adding £99 million to the deal's value,

According to a report prepared for the council's External Services/Providers Monitoring Group by Director of Finance Suzy Douglas: "CGI currently employ 65 members in the Borders region and have between 80 and 96 members working on Borders activity."

The figure means fewer staff are employed locally by CGI than the 71 on the payroll five years ago.

Ms Douglas's report, to be considered at a meeting of the monitoring group next week, adds that the numbers in the document "can be compared against the 169 projected target for 30/09/24 and the 209 aspirational target for the same period. 

"Two new graduates have commenced from the region, a further list of candidates have been aligned to open roles and further roles have been actively recruited. The next recruitment event in Tweedbank is now being planned. CGI intend holding these events twice per year in conjunction with the continuous drive to increased headcount from within the Borders region."

A critic of the £191 million deal commented: "It is outrageous that even counting CGI employees 'working on Borders activity' who are by implication - not located here - they don’t get to the 200 jobs talked up in 2016.  The important issue was skilled jobs in the Borders…that was one of the reasons behind CGI getting prestige new office premises right at the Tweedbank railway station. It feels as though the Borders has been 'had'”.

Outsourcing work has certainly been lucrative for CGI IT UK, according to the Canadian-controlled British subsidiary's accounts. Revenue from outsourcing services is quoted at £512.798 million in 2023 (up from £388.479 million in 2022).

Profit before tax of £280.406 million last year was well above the 2022 figure of £162.037 million. This allowed the firm to pay dividends of £229.695 million.

CGI IT UK employs a total workforce of 5,730 in this country.

We asked the company: "Can CGI offer a comment on the figures, and explain why the promised 200 Borders-based jobs have never materialised?"

In reply, a spokesman told us: "We do not comment on our commercial arrangements with clients".