As part of the updated deal, some of the local authority’s services will be brought back in house - bringing 500 new jobs with it.
Birmingham is currently part of a joint venture with business outsourcing provider Capita, but this arrangement reportedly costs upwards of £100m.
A package of measures has been proposed with the aim of reducing this spend, improving customer services and deliver ICT-related budgeted savings targets as part of the Council’s financial plans.
Following pressure to reduce the costs of the contract, the local authority’s Cabinet will conclude a review of the Service Birmingham deal.
It is expected the Cabinet will be recommended to approve the continuation of ICT contracts, providing significant savings can be achieved over the next seven years before the arrangement meets its end.
Approval will also be sought for moving the Council’s contact centre in-house by the end of 2014.
“We have negotiated an agreement with Service Birmingham which provides a major step forward in reducing our cost base for ICT,” claimed Cllr Ian Ward, the authority’s deputy leader.
“On balance, the Council considers the risk of changing ICT provider at this time, too risky, would take a considerable period of time to procure and would cost additional tens of millions upfront in early termination charges and re-procurement costs,” he added.
Ward also claimed that both parties involved will be working harder to make the partnership work more effectively than it has done to date.
“We need to make sure we have an ICT strategy that is git for purpose and that we improve our control and planning for projects,” he said.