Somerset County Council will bring its ICT services back in house following a vote to abandon a an outsourced shared services venture.
The authority’s cabinet voted yesterday to exit the troubled Southwest One company which provides back office services to itself and partners Taunton Deane Borough Council and Avon and Somerset Constabulary.
The contract, which also includes supplier IBM, had been due to expire in November 2017 but the council has decided to exit early.
Somerset’s council leader John Osman said: “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 County Council and its tax payers.”
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The council has already launched a procurement process to find a new hosting and support supplier for its SAP system, which provides finance, HR, payroll and procurement services.
The original term of the contract was 10 years with an approximate contract value of £535m across all partners, although this was reduced to £158m following changes to services provide in 2012 and 2013.
Somerset said that it expects to pay less than the £14m a year it currently shells out to Southwest One for the services it currently gets.
Osman said: “This contract was created nearly a decade ago when the economic climate was very different. Since then local government has changed dramatically with a well-documented fall in funding and consequent need to make savings.
“We are a smaller organisation that has made big changes to the way it works. The fixed price nature of the contract has prevented us from making some of the savings that should come with those changes.”
In April, a report by Taunton Deane officers found that the council had made less than a third of the £10m savings it had predicted over the course of the contract.
