Somerset council settles out of court with service provider Southwest One

Somerset County Council has settled a dispute out of court with its outsourced service provider Southwest One

Somerset County Council has settled a dispute out of court with its outsourced service provider Southwest One.

Somerset council and Southwest One have reached an agreement to resolve a legal dispute over payments as well as issues around the services.

Southwest One is 75% owned by IBM and part-owned by the council. The council said in a statement: “Southwest One and Somerset County Council can confirm the action concerning Strategic Procurement Services has been successfully resolved.

"Both parties will now focus on continuing to build their long-term partnership as Southwest One evolves and delivers services to Somerset County Council and the other joint venture partners."

Last year Somerset County Council began making preparations for legal action from Southwest One.

This was the culmination of 18 months of crisis talks over the joint venture's failure to deliver procurement savings IBM promised at its outset.

In August last year, Jo Nacey, chief accountant at Somerset County Council, said the authority made a contingent liability for a contract claim from Southwest One, although it believed the claim would be groundless. 

"There's a possible court case regarding our procurement liabilities with Southwest One. We rigorously deny it," Nacey said.

"They believe they have a claim of a share of our procurement savings. They are contracted to find procurement savings. When they reach a certain level, they are entitled to payments. We are in dispute over the amount of savings we have been given. 

"They say they have delivered more than we think they have. We say they've not reached that level and won't pay."

Speaking to This is Somerset Conservative council leader John Osman said: “The agreement sees payment of Southwest Ones fees which we have been withholding for a mutually agreed sum. 

"Key services such as procurement and property management will return to the council. Most importantly, cancelling the gainshare agreement will save Somerset County Council residents millions of pounds in the future as those sums can now be kept by the council.”

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