Local government business process outsourcing provider Civica is to build a new "centre of excellence" for tax collection and benefits administration in the city of Gloucester, as part of a new outsourcing agreement with the local council.

Civica already supplies Gloucester City Council with IT equipment and services to support tax collection and benefits administration. The council spent over £70,000 with Civica in March, according to its open data portal.

Under a new, seven-year agreement that the council describes as "ground-breaking", Civica will create a new delivery centre for revenue and benefits processing. Civica hopes that in future it will provide revenue and benefits processing services to other local authorities.

"This is the first step in the creation of a centre of excellence in the city for local government revenues and benefits administration that will sustain local employment and bring new business to Gloucester," Civica claims.

The agreement will deliver £220,000 in annual cost savings by introducing "process and IT-led innovations", it says, while safeguarding employment for the 67 council employees who work on the revenue and benefits processes.

"It’s very pleasing to be setting up a service centre with the potential to increase its contribution to the local economy and local jobs as time goes on," said Gloucester City councillor Debbie Llewellyn in a statement.

In 2009, Civica acquired revenue and benefits IT supplier IBS OpenSystems from outsourcing giant Capita. Capita had acquired IBS OpenSystems in 2008, but was forced to sell it on after the Office of Fair Trading found that the acquisition would have unfairly constrained competition in the local government revenue and benefits IT market.