Oh dear, it has not been a good week for Local Authority outsourcing. South West One published their accounts showing that the losses are still being racked up. You can download them here. It records that 136 staff were transferred back to Somerset County Council. The accounts record that in the five years that the Joint Venture has been in place they have realised savings of £13.4 million. Not bad you might think until you read that the retained losses amount to £43 million and that IBM have capped any further liabilities at £10 million. Worst of all the directors' statement records that "The company is currently in dispute with the joint venture partners on a number of matters". Following a mediation on the 4th and 5th of July, "no settlement has been reached and accordingly the board will be reviewing which of the remaining options in the contractual procedure should now be pursued." Tonight on the BBC it has been announced that South West One is launching legal action against Somerset County Council.
Set out is a statement from Somerset County Council:
“We are in disagreement with Southwest One about the quality of the procurement service and what payments Southwest One is entitled to as a result of savings made by getting better deals through the joint venture.“As set out in the terms of the contract, we had hoped we would be able to settle this issue through mediation and negotiation. It is now apparent that this will not be possible and it is disappointing that we are in the position of going to court. “It is paramount that we look after the best interests of tax payers and take action when standards of performance and quality are not being met. “We will therefore robustly defend our position and make counter-claims where we believe we have suffered losses. “Somerset County Council will not be commenting any further on this issue at this stage.”
Today also saw Cornwall Council vote against a massive outsourcing programme with one councillor stating that "much of the evidence used to support the joint venture was pure conjecture".
The big issue here is with one of the most prominent large scale outsourcing JOINT VENTURES going wrong why on earth are Barnet Council so determined to repeat the mistakes of others and move to a JOINT VENTURE model without any debate or discussion.. I have read the Barnet Council Audit Committee papers this evening and there seems to be no mention of any risks associated with the £1billion One Barnet outsourcing project. Are the council in denial, are they badly advised or are they paralysed in the headlights of this monster and unable to move? Who knows but one thing is for sure unless this madness is stopped now, every single resident is at a massive financial risk.