Capita Group’s proposed 175m-pound ($362m) outsourcing deal with North East Lincolnshire Council has been scrapped after final negotiations between the two sides broke down.
Capita, which in September was named as preferred bidder on the 12-year contract, said it had been unable to reach a mutually acceptable commercial agreement with the council and the planned partnership had been abandoned as a result. No further details were given.
The planned deal covered a range of information systems and business process services. Some 350 Lincolnshire council employees were expected to transfer to a Capita-run joint venture that would be responsible for delivering the services.
Losing the deal is a setback for Capita, which has secured a number of major UK public sector contracts already this year. In August, the company inked a 10-year deal worth 290m pounds ($600m) with Southampton City Council, while in May it clinched a 10-year agreement with Birmingham City Council worth 475m pounds ($983m).