Somerset County Council has today decided to pursue an early exit from the Southwest One contract.
The contract is due to expire in November 2017 but, following today’s decision by its Cabinet, the Council will be coming out of the contract early and bringing all services back in-house within the next 12 months.
The returning services include ICT, Customer Contact and a range of other back office services.
“This is an important decision and has been taken after a great deal of consideration,” said Leader of the Council, Councillor John Osman.
“Having carefully weighed up the benefits and costs of letting the contract run its course or leaving it early, we have concluded that an early exit is in the best interests of the County Council and its tax payers. Our partners in Southwest One have been kept informed and we will be working closely with IBM and Southwest One to make the transfer back of services as smooth as possible.”
Southwest One is a joint venture between IBM, Avon & Somerset Police, Taunton Deane Borough Council and Somerset County Council. It was established in 2007 to deliver a range of support services to the local authority partners. All Southwest One partners have been considering their options ahead of the contract’s scheduled end date of November 2017.
The County Council pays £14m a year to Southwest One for all the services it currently delivers to the authority. The Council expects these costs to fall significantly once it has regained control of those services.
In 2012 and 2013 services such as procurement, property and facilities management, HR and finance advisory, and some parts of ICT were successfully returned to the Council.
Cllr Osman added: “This contract was created nearly a decade ago when the economic climate was very different. Since then local government has changed dramatically with a well-documented fall in funding and consequent need to make savings.
“We are a smaller organisation that has made big changes to the way it works. The fixed price nature of the contract has prevented us from making some of the savings that should come with those changes.
“More change is on the horizon and the pressure to make efficiencies and savings has never been higher. We need more flexibility than this contract allows and leaving early allows us to start making changes and savings sooner.
Southwest One is a joint venture with 75% owned by IBM, SCC holding 11.75%, Avon and Somerset Police with 8.25% and TDBC 5%.
- The returning of services will involve around 180 seconded staff returning to the council, along with a number of other staff who have been hired directly by Southwest One to provide services to the County Council.
- The publically available Cabinet paper relating to this decision can be found here http://www1.somerset.gov.uk/council/board3d/2015%20December%209%20Item%2012%20Paper%20H%20Review%20of%20the%20SouthWest%20One%20contract.pdf
- The original contract value was £535m across all partners. Due to negotiated changes to the contract and services since 2012 and 2013, the approximate current contract value over the contract term is now £158m.
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