Somerset sets date for IBM court battle

Somerset County Council is fight a High Court battle with IBM over their failed Southwest One outsource venture.

Their conflict will reach this dramatic conclusion in November, four years after Somerset started trying to pare back the £400m, ten-year contract it struck with IBM in 2007.

Somerset confirmed the court date in answer to a Freedom of Information request made by David Orr, a local campaigner.

A Somerset spokesman said in a written statement it was defending legal action brought by Southwest One, which is 75 per cent owned by IBM.

SW1 thought the public authority should pay it more money, according to terms established in their contract for outsourced backoffice, procurement and IT services.

Somerset had replied by suing SW1, in which it has a 17.5 per cent stake of its own. It’s counter-attack concerned “performance and quality”, said Somerset’s statement.

A spokeswoman for Southwest One, said it was suing Somerset for bonus payments it thought were due under its contract with Somerset.

“Despite extensive efforts, South West One has been unable to resolve the matter satisfactorily and is now looking for the Court to determine the issues in accordance with the agreed dispute resolution procedure,” said her statement.

It insisted Southwest One provided a “robust service” and “substantial benefits for taxpayers”.

Both parties said the court action forbade them from commenting on the dispute any further. Neither statement was any more or less informative than they had made about their troubled contract before it degenerated into a legal battle.

Both have for months now refused requests for copies or references to public documents of their dispute over public money.

Somerset Council is however required by law to answer Freedom of Information requests. Though it is allowed to take its time. David Orr filed his formal request for information about the dispute on 13 December. He did not receive a reply until yesterday, after the statutory time limit for a response had passed.

Southwest One is not required to answer public requests for information, though it is 25 per cent owned by the public. The IBM joint venture has still not answered questions relating to financial irregularities exposed by a Computer Weekly investigation last year.

Southwest One’s spokeswoman, who is on secondment from Taunton Deane District Council (which itself owns 12.5 per cent of the venture) insisted it was due more money from Somerset because it had identified savings the Council might make in its procurement – by buying pens and napkins differently, that sort of thing.

It did not claim to have delivered these savings under the procurement part of its contract. It had identified them. It could be deduced that Somerset hadn’t actually realised them, or had perhaps not taken them up.

“South West One has secured procurement savings that amount to £24.5 million,” said Southwest One’s written statement.

It did not say how this compared to its targets and why it should be the subject of a legal dispute. Nor did it say how much money it was owed. Nor why it had not been paid. Nor why it believed it was due. It just bragged about identified procurement savings.

“South West One has also successfully achieved external recognition from the Cabinet Office for Customer Service Excellence and operates an award-winning Customer Contact Centre,” it said.

Southwest One said in its problematic 2010 accounts that it had met 91 per cent of Key Performance Indicators specified in its contract with Somerset. It had delivered £7.6m of savings to the Council. It had promised £190m of savings by 2017. It’s 2010 statement said it had identified another £139m of savings. Somerset has been cutting off payments to Southwest One since a Conservative council came to power in 2009. Earlier this year it took some of SW1’s services back in house after two years of negotiation.