According to a conservative member of its cabinet, the somerset county councils troubled outsourcing contract with the Southwest one has stalled the authority program of cost cuts. The councilor said that southwest one a shared services venture with the IBM in which Somerset owns a 17.5% share. The Southwest One is now suing the counci8l for non-payment of fees, however after a dramatic cut in council payments predicated a succession of financial losses at the outsourcing venture.
Southwest one was stopping the council making cuts or privatising services because it refused to give up its claim for fees on services the council discontinued stated by councillor David Huxtable. He also said that every part of their organization has a part of Southwest One appended to it, whether it is buying a financial services , property advice. However, the local authorities can not afford to do all the stuff that they used to do. The conservative-led council has been trying to change its contract ever since it won power from the Liberal Democrats in the local election.
In the year 2010, the conservatives cut payments to Southwest One by 31%, their first year in power. According to its published accounts, somerset had accounted for 75% of the outsource ventures income. However by the year 2011, the council had cut payments to supplier by over 50% or £27m. The only other council that joined the Southwest One partnership, Taunton Deane District Council cut its annual payments by just £1m since 2008. The Avon and Somerset Police, this only other public body to join the venture increased its payments by 70% or £8m. The three authorities account for the 90% of Southwest One’s revenue.
Huxtable stated that in the harsh political world it was a contract set up by the Liberal Democrats and we’ve spent the last three years trying to renegotiated it to get more flexibility in the contract. He said that they lost quite a lot of money over the last two or three years and he suspected that their current business plan is to try and charge all their clients more money to get it back.
If people looked at any of their board minutes you will find their recovery plan is pretty much predicted on trying to screw the people who are in partnership with them, on charging more of the services they provide or providing the services at a lower level at the same cost. There is only so many ways that you can cut if you are constantly losing millions of pounds.
The SouthWest one stated that its annual accounts had successfully completed the installation of an SAP system it has been anticipated. It would confirm how much money the former was claiming in its legal action. The SouthWest One is said in a statement that its legal action seeks the recovery of sums due under contract.
By the half way point it had saved just £13.5m, the outsource venture promised to save £190m for its partners over 10 years. The Somerset council stated in a statement that the disagreement was over the quality of Southwest One’s procurement service and whether the outsourcer had made enough savings to warrant charging a bonus fee. The southwest one’s accounts said that it had saved £7.6m for somerset to date.
REFERENCE:
http://www.computerweekly.com/news/2240162786/Southwest-One-is-blocking-Somerset-cuts-says-county-councillor
