Friday 17th July, 2015

Two councils are considering their options for when their shared services contract ends in 2017 after the cost saving measure managed to achieve 30% of projected savings.

South West One (SWO) was set up by Somerset CC, Taunton Deane BC and Avon & Somerset Police with IBM in 2007 to provide back-office services.

However, it failed to  attract significant external business and both councils have withdrawn several services from it.

In response to questions from the union Unite, the council said only £3m of SWO’s original £10m procurement savings target had been realised.

A council report noted the “costs of exiting” SWO were “likely to be significant”, despite its annual fee having fallen from just over £5m to £1.6m after five of the 15 services placed with SWO were taken back in-house.

“SWO has not attracted new partner authorities to the extent originally envisaged and has not grown as a business,” the report said.

“The private sector partner, IBM, has in recent years disposed of much of the non-ICT element of its business and appears to be now focusing globally on its core ICT business.”

A Somerset spokesman said: “As SWO is a large and complex contract it makes sense for all parties to plan well in advance what happens when it comes to an end.

“All options are being explored by Somerset CC. Nothing has been agreed or ruled out at this stage.”

SWO was controversial from the start. It was championed by then Somerset chief executive Alan Jones, but was widely opposed at the time.

A Somerset report last September concluded SWO had “perhaps” been too ambitious in scope.

In 2013 Somerset took back about 100 staff seconded together with four services.