Colchester Council staff are worried over moves which could lead to a department being privatised.

Cabinet members will be asked if they want to consider getting an outside firm to run Revenue Services, which deals with council tax, business rates, benefits and payroll.

All 90 staff have been briefed about the possibility of privatisation and morale is said to be low following the news. However, it has been stressed that jobs are not under threat.

The issue is being looked at because the council has to decide soon whether it should spend up to £500,000 on new IT equipment for the department.

If there was a possibility of privatisation, which might have to be looked at under the Government's directive to get best value for money, then it would be pointless agreeing to buy the equipment.

The head of revenue services is said to favour keeping the work in-house and making improvements.

One staff member, who did not wish to be named, said they were worried about the future.

He added: "Some of the staff think the council wants to sell the department off because it uses up too much money to run it with no signs of increased efficiency."

Since the Government decided to use Colchester Council's housing benefit section as a pilot for fraud-busting measures, there has been an increase in paperwork and claims are taking much longer to deal with.

In May the council said the measures had caused delays for 13,000 Colchester housing benefit and council tax benefit claimants.

Colchester Council chief executive John Cobley said: "A decision needs to be made because if the service is to be kept in-house, £400,000-£500,000 needs to be spent on computer facilities, which would not need to be spent if it was to be outsourced.

"Any approach to a private firm to take this work on would be on the basis that staff would transfer under existing terms and conditions and there would be no job losses."

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