Lambeth Council is set to insource its call centre operations while outsourcing debt recovery, marking a significant shift in its approach to customer service and financial management. The decision was discussed at a recent Housing Scrutiny Sub-Committee meeting, where officials outlined the strategic rationale and anticipated benefits of this hybrid model.
Recognising that some residents may not be digitally included, the council has emphasised that a call centre operation will remain in place for all services. Councillor Cowell stated, The objective is not 100% digital... there will be the idea is to have the provision for the complex cases and for those who unfortunately will never come on to the digital journey. Therefore, 20, 25% or more will still be able to talk to us.
The move aims to improve service quality, accountability, and integration, particularly in customer-facing areas. By bringing the Housing, Revenues and Benefits, and Corporate call centres back in-house, Lambeth seeks to exercise greater control over frontline service delivery and ensure a more consistent customer experience across all channels. The council's contract with Capita, which currently covers these services, is due to expire on 30 November 2026.
According to a briefing provided to the Sub-Committee, the decision to insource the call centre and back-office Council Tax and NNDR (Business Rates) processing, while outsourcing the Out-of-Hours Contact Centre and Enforcement (debt recovery), was made by the Cabinet in December 2024. This hybrid approach is intended to align closely with Lambeth's wider digital and customer transformation agenda, including the development of a new Digital and Customer Strategy.
Councillor Cowell, Cabinet Member for Digital, Data and Resident Experience, stated that the Labour 2022 Council manifesto made a commitment to considering insourcing housing as the first option for all finances. He added that the council is aiming to bring all centres currently approved by Capita in house with some specific services reprocured from another service provider. Ensuring a smooth transition to this new model is a strategic priority for the Council,
he said.
Natasha Patterson, Chief Digital and Data Officer, addressed concerns about the risks associated with the transition, including potential redundancy costs and technology integration challenges. She assured the Sub-Committee that mitigations were in place, such as relying on existing council resources and moving infrastructure to the cloud. Patterson also noted that Capita is playing ball
and being cooperative in the transition process.
The transition also carries risks related to staff currently employed by Capita. The council has identified TUPE (Transfer of Undertakings (Protection of Employment)) as a key risk and area of work, with potential for redundancy costs and challenges in retaining key staff during the transfer.
To mitigate potential challenges and delays in the transition to the new model, which has a deadline of November 2026, the council is implementing several contingency plans. These include phased delivery, early recruitment, built-in training and transition plans, and detailed dependency tracking. The HSSC - Capita Transition update report states that the portfolio is being managed through formal governance, with regular oversight from the Executive Steering Group, Operational Board and the Finance and Transformation Board.
The Sub-Committee requested a gap time chart outlining the project's timeline and milestones, as well as a report back in six months to assess progress and address any emerging issues. The KPIs for measuring the success of the new model are yet to be agreed, but the council aims to achieve a reduction in call volumes through improved first-call resolution and enhanced digital access for residents. Potential metrics under consideration include an organic reduction in calls due to improved first-call resolution, the rate at which residents switch from phone to digital channels, and customer satisfaction feedback gathered through a real-time dashboard.
