Somerset County Council settle with outsourced service provider SouthWest One

Dave Orr, campaigner for truth in Somerset, sent me news that Somerset County Council (SCC) has today announced they have settled out of court with their outsourced service provider SouthWest One (SW1) ,  which is 75% owned by IBM, 15% by SCC itself, with smaller stakes held by Taunton Deane Council and Somerset Police.

You may remember the long-running problems, (here is one of our many previous posts) culminating in SW1 going after what they claimed was money owing as their share of the procurement savings they had generated. The whole outsource has been a bit of a nightmare for everyone involved from the beginning really.

One interesting point is that around 100 people will also be returning to SCC employment from SW1, including “strategic procurement” staff as well as some estates the Property and FM service, except for Hard FM, and the strategic ICT function, including Web Management.

The financial details of the settlement are being kept confidential at the moment although no doubt after some freedom of information requests and a lot of fuss the facts will emerge...

More to follow, we suspect, but here is the Council minute outlining the deal and next steps. Procurement Claim and SouthWest One disputes

Voices (4)

  1. Dave Orr:

    Total paid out by Somerset to IBM & for legal costs reported by BBC as £7m:

    http://www.bbc.co.uk/news/uk-england-somerset-21965545

    A total of £2m has been spent renegotiating the contract and in legal costs in addition to the [circa £5m] settlement.

    ‘Commercially sensitive sum’

    Council leader, John Osman has confirmed the settlement sum is “lower than a fifth” of £25m.

    Conservative Mr Osman added: “Southwest One issued a claim in excess of £25m plus associated legal costs – there could have been a bill of £40m if we were unlucky at court.

    “Unfortunately I am bound by a confidentially agreement but Southwest One has insisted that sum is commercially sensitive.”

  2. Dave Orr:

    This FOI (not mine) about legal costs for SCC has been repeatedly delayed:

    https://www.whatdotheyknow.com/request/external_legal_support_for_south

    Is this delay being driven by the politics of an election in early May and the pre-election purdah on 5th April?

  3. Dave Orr:

    Somerset CC Leader John Osman blames Lib Dems for SW1 by “writing a blank cheque” for IBM….

    With only 7 days to County Council elections purdah starting…..expect a Lib Dem riposte – Let the Blame Games begin!

    http://www.thisissomerset.co.uk/Somerset-County-Council-services-provider/story-18533628-detail/story.html#axzz2OosCWMZk

    Mr Osman blamed the previous Liberal Democrat administration for the problems.

    He believes that the problems arose owing to the way the contract was worded, the actions of the previous Lib Dem administration transferring services to Southwest One that should never have transferred and the failure to clarify the savings sharing element of the agreement. In John Osman’s view this was the “equivalent of the Lib Dems writing a blank cheque”

    Southwest One, which is 75 per cent owned by IBM and part owned by the county council has been in financial trouble ever since the Conservative administration was elected in 2009 and payments were dramatically cut.

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