The deal means accountancy services for Broomleigh Housing Association will be taken on by Eastgate Accounting Services, part of the Eastgate group.
John King, managing director of Eastgate’s financial services division, said: ‘We are delighted to have established the partnership with Broomleigh. This is a very significant contract, not only for Eastgate and Broomleigh but also for the social housing market.’
The deal will immediately spark speculation that more outsourcing deals in the public sector.
Outsourcing in the private sector was pioneered by Andersen providing services to oil company BP.
At first the development was seen as ‘the future’ for accountancy services, yet despite continuing popularity the innovation has not met with the kind of success envisaged by commentators.
However this is believed to be the first instance of outsourcing in the public sector.
Eastgate’s deal will last five years with the company taking on responsibility for the delivery and processing of financial transactions including all payments and receipts, as well as reporting and the production of statutory accounts for one of the largest registered social landlords in the UK.
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