Original URL: http://www.theregister.co.uk/2009/03/30/leeds_contractor_rates/

Leeds council cuts contractor rates

Recession really is opportunity

By John Oates

Posted in CIO, 30th March 2009 10:02 GMT

Leeds City Council is telling all its IT contractors to take a ten per cent pay cut.

This has become standard practice for many private companies, especially hard-up banks, but is less common in the public sector.

The contractor who contacted us felt the council was taking advantage of the economic downturn to force cuts on its staff but the council insists it is feeling the pinch too.

A Leeds City Council spokeswoman said: “The council operates a framework contract for the supply of ad-hoc ICT contractors to meet peaks in workload demand, or where a short term need for specialist skills is required to supplement its internal workforce.

“Because of current budget pressures all suppliers on the framework have been asked to provide a ten per cent reduction on the rates paid for existing and future ICT contractors. The suppliers concerned have indicated that this is typical of what is happening across the ICT sector at this time.”

The council is under pressure due to lower government grants and is suffering from the recession. The spokeswoman explained: "Revenue from leisure centres and charges for planning applications have dropped significantly in recent months as the economy began to decline.

"The current climate is also seriously affecting the council’s ability to generate money from the sale of surplus land and buildings which in the past has allowed it to invest heavily in services."

Banks, oil companies and outsourcers have all forced similar deals on their contractors. ®