Thurrock Council ends services contract five years early

A 15-year services contract awarded by an Essex council worth £20m a year to provider Serco has been ended early.

Thurrock Council said about 350 staff employed by the firm would now return to the council but it still had to find annual savings of £4m.

Council leader John Kent said: "We would rather any profits went direct on services to local people rather than Serco's shareholders."

Serco said after 10 years the contract was no longer fit-for-purpose.

Mr Kent said the services contract costs "Thurrock Council around £20m every year".

"We have agreed to pay just under £10m to end the contract - a lot of money, but only half what we have paid Serco in the last few years.

"That money is not simply a pay-off, but includes things like computer equipment and telephony that will transfer back to the council."

He admitted there is a loss of profit payment to Serco within the negotiated settlement to end the contract signed in 2004.

"I want to assure the 350 or so people who will be returning to the council that we will be working very closely with Serco to make that move is as smooth as possible over the coming months."

Sean Hanson, Serco's managing director for citizen services, said: "Unfortunately this old contract with Thurrock Council was no longer fit-for-purpose.

"It was in the interests of both Thurrock Council and Serco to end our partnership early.

"Our teams have delivered services over the last 10 years in support of local residents and I am proud of their achievements."