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Somerset plans early exit from Southwest One deal

Somerset County Council plans to pursue an early exit from its Southwest One contract and bring services back in-house in 12 months

Somerset County Council has had a “re-think” of its approach to service delivery and will exit the Southwest One deal by the end of 2016.

Together with Taunton Deane Borough Council, Somerset signed a ten-year IT shared services outsourcing deal with Southwest One, a joint venture set up by the councils, IBM and Avon and Somerset Police in 2007.

The contract is due to expire in November 2017, but Somerset said in a statement that it will be exiting the contract early and will bring all services back in-house in the next 12 months.

In a council cabinet paper, it says the outsourcing deal was “envisaged as a much larger exercise in collaboration, with a wide range of public sector entities having originally expressed interest in the Southwest One framework”.

“The fact that, in the end, Southwest One was unable to bring these further clients on board meant that the level of investment required to deliver the benefits originally envisaged became excessive and detrimental to all parties,” the paper said.

Leader of the council John Osman said in a statement that the council will work closely with IBM and Southwest One to “make the transfer back of services as smooth as possible”.

“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 council and its tax payers,” he said.

The Southwest One deal had a troubled run. In 2012, the council’s then leader, Ken Maddocks, called the joint venture a failure and said the project had made “staggering losses” and delivered little of the savings originally promised.

The council refused to pay the joint venture and began making preparations for legal action from Southwest One, the culmination of 18 months of crisis talks.

In 2013, the two parties settled the dispute out of court, but by then Somerset had already brought human resources, finance and accounting functions back in-house.

The council hopes that exiting the deal early will enable it to “improve the agility of back office services and systems to support our transformation aspirations and respond to financial challenges”.

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