The Southwest One story (part 3) – from hubris to High Court (almost)

Part 3 of Dave Orr's history of the Southwest One Somerset JV - the story turns controversial as SAP is poorly implemented, with disastrous reputational results and a breakdown in relationships. Read part 1 here and part 2 here.

The year is 2009 and after several implementation delays IBM/Southwest One implement a large SAP IT system for Enterprise Resource Planning (ERP).

SAP is a key component of the bid to “transform” Somerset County and Taunton Deane Borough Councils and the Avon & Somerset Police. Not only would SAP control purchasing, to direct all spend to central contracts, to aggregate spend and savings, but IBM billed it as making efficiency and further savings from “out-of-the-box” processes.

The Councils believed that they were getting a customised version of SAP by IBM from the prior Bradford Metropolitan Council contract, that was tailored to local government or at least a version based upon a local government template.

IBM used an offshore division (IGSI) in Bangalore, India to configure and assemble SAP. Were problems with inter-country communication and differing cultures, part of the problem, in what was later described by the Finance Director as a “poorly configured implementation of SAP”? Problems were still in final fix, as late as April 2013; 4 years after implementation.

A “bolt-on” scanning solution led to a large number of problems with late invoice payments, duplicate payments (£4.6m) and high levels of uncollected debts that went on into 2010/11.

In 2011, the on-going duplicate payments issue led to the local newspaper in Taunton having a front page, with a scathing one-word headline: INCOMP£T£NT

The new Council web sites delivered by Southwest One were rated 1* (Poor) by the assessor SOCITM; and even now you cannot search and retrieve Council papers based upon content!

In May 2009, the local elections had resulted in a change of administration from Lib Dem to Conservative. The Conservatives had campaigned to “put Southwest One on a sound footing” and to tackle excessive contract secrecy.

A Somerset Conservative MP, Ian Liddell-Grainger, fought a constant, high-profile battle of words with: Somerset CEO Alan Jones, the Lib Dem Leader Councillor Jill Shortland and Resources Portfolio Holder Councillor Sam Crabb. Liddell-Grainger ran a controversial, satirical blog called “Mogg the Blog” that chronicled all the failings, issues and problems in a derisory style.

With parliamentary privilege and immunity from libel proceedings, Liddell-Grainger made allegations of corruption, vehemently denied by all named in his Southwest One speeches and also criticised the “light-touch” regulation of the now defunct Audit Commission.

It wasn’t long after the May 2009 elections, before the architect of the controversial joint venture with IBM for Southwest One, CEO Alan Jones, negotiated a deal with the new Council Leader to leave and took early retirement in a £340K deal.

In 2010, the Conservatives commissioned a report into Southwest One, led by Audit Committee Chair Councillor John Wilkins. Ironically, the report was only published after a successful appeal for a refused Freedom of Information request, citing high public interest.

By 2010/11, it was abundantly clear that, even allowing for Government budget cuts, the promised £200m of savings forecast by IBM pre-contract, were “pie in the sky” and savings in the Councils were running far below that level.

Even in 2013, more than halfway through the 10-year contract, payments to IBM and costs for Southwest One are far in excess of the so-called “assured” procurement savings returned to Somerset County Council by Southwest One.

There were controversies over the former Chief Constable Colin Port being a Director on the board of his largest supplier Southwest One. Shortly after a Home Affairs Select Committee report called “The Landscape of Policing” in 2011, Port resigned his Directorship of Southwest One.

In 2011, the Police deal to join Southwest One, was also criticised as a potential £2.17m subsidy from Somerset taxpayers to Bristol and other non-Somerset policing areas; the Audit Commission regulator denied the appeal, just before he too took retirement (as the Audit Commission itself was wound up).

In 2012, the Conservative Leader Councillor Ken Maddock, delivered a withering, public attack on Southwest One in Full Council, from which relations never recovered.

In return, Southwest One threatened court action for disputed fees and a high court hearing was only avoided by the Council settling out of court, adding around £7m to the burgeoning costs of Southwest One.

Many of the transferred services and staff in Southwest One have now returned to Somerset County Council, also forcing Taunton Deane Borough Council to review services, including the return of the largest Taunton Deane service for Revenues and Benefits.

Next week: Part 4…  What lessons can be drawn from the failure of the controversial joint venture Southwest One?

First Voice

  1. Dave Orr:

    *STOP PRESS* Now that the former Chief Constable Colin Port has retired (in controversial circumstances after taking the newly elected Police & Crime Commissioner to court), the Police support for SW1 is also beginning to unwind:

    The Police have very recently decided to take the Property and Facilities management back in-house away from SW1.

    There are strong rumours that the Police are also fed up with SAP still not being right (workforce planning – shift rotas).

    Will we see another round of legal actions over SAP configuration?

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