As Barnet Council embarks on its One Barnet/Future Shape outsourcing project, it is worth considering the experience of other councils where similar projects have been tried.
You may have seen the Southwest One ITV West documentary made 18 months ago detailing the IBM takeover of services in Somerset. The project was beset with controversy. Somerset County Council back then was a Lib-Dem Council; however the Deputy Leader found himself subject to a large number of Standard Board charges. This councillor was objecting to the Southwest One project. It took him two years to clear his name.
Somerset UNISON fought a campaign to expose the secrecy surrounding this Project and surprise surprise the branch secretary was suspended for almost six months. I am pleased to report he is back in the UNISON office.
For those of you who saw the ITV West documentary will know the project was shrouded in secrecy and very few people actually saw the Business Case for the project. I have a copy of the documentary if anyone would like to view it.
Bridgewater MP Ian Liddell-Grainger (Con) has been campaigning against Southwest One for over two years and fought hard to have access to the Business Case.
I imagine Somerset County Lib-Dem councillors wish they had demanded to see the Business Case as the Lib-Dem’s were later ousted by the Conservatives in the last elections.
Interestingly a contingent from SouthwestOne paid a visit to Barnet during the summer. I don’t know what they discussed but after viewing this latest news I really, really hope they haven’t been advising Barnet Council on the benefits of partnerships with the Private Sector
Professor Dexter Whitfield was the consultant providing expert advice for Somerset UNISON Branch. Dexter said at the time “The Somerset strategic partnership with IBM was a classic example of ideologically driven outsourcing. Somerset UNISON warned about the declining level of savings and higher contract management costs. The increasing annual losses of the joint venture company serve to illustrate the high risks involved in these contracts."
Dexter has and continues to provide expert advice for the branch.
Take a look at this report
From Local Government Chronicle
Somerset joint venture loses £16m in its first year
21 October 2010 | By Ruth Keeling
A controversial joint venture between Somerset’s councils, police force and IBM has made a multi-million pound loss for the second year running.
Southwest One posted an operating loss of £16.1m in its second year of operation, according to accounts lodged with Companies House earlier this month.
The 2008-09 accounts state that the loss – a significant increase on the £2m it lost in its first year – “was larger than originally budgeted” because its investment period had to be extended and because it failed to attract new customers. A credit facility from parent company IBM means it will continue to operate for the “foreseeable future”, according to the accounts.
The joint venture was set up in September 2007 by IBM, who own three-quarters of the company, and Somerset CC and Taunton Deane BC to provide back office services including HR, finance, estates management and IT. Avon and Somerset Police later joined the partnership but it has been dogged by arguments from the first.
Most recently, it emerged that the two councils would be fined because of the extra checks that the Audit Commission had to make on their accounts prepared by the firm. Taunton Deane said it would pay its £15,000 charge itself while Somerset CC, whose leader is currently considering an internal review of the Southwest One contract, said it would pass the charge on to the company.
The contract, worth £585m over 10 years to the company, was set up with the aim of finding efficiencies for the three customers, although those savings have been downgraded from the £200m originally quoted to £144m “pipeline” savings listed in the most recent accounts.
In a statement, Southwest One emphasised that the 2008-09 figures were “a reflection that first of a kind ventures like this require up-front investment in the early stages” and stated that there had been no negative impact on the service. In fact, it added, a new customer contact centre had call waiting times for residents.
Southwest One’s accounts blamed its failure to attract new partners on the “adverse UK economic environment, coupled with a high degree of political uncertainty”.
However, the company said it was in discussion with a number of potential customers and argued that the spending review and the communities secretary’s enthusiasm for shared services would provide “significant opportunities”.
It stated: “South West One, as a pioneer in this field, is ideally-placed to help public bodies respond to this challenge”.
But Bridgewater MP Ian Liddell-Grainger (Con) branded the partnership a “failure” and questioned whether they would have any success in attracting new partners. “They’re such a tarnished outfit that short of changing their name there is no point in talking to anybody,” he said.
Somerset CC said it had no further comment to that provided by Southwest One.
"I bet they had no comment."
I nicked this from the Unison blog with a few small amendments - here's the original