Somerset outsourcing firm 'waste of money'
- 19 September 2012
- From the section Somerset
A deal between Somerset County Council and Southwest One has been criticised as a "disaster" and "waste of money" by a Somerset MP.
Southwest One was set up to save money by carrying out back office tasks for two councils and the police.
But MP Ian Liddell-Grainger has said the deal will instead lose the council £13.7m over five years.
Southwest One has said it has secured £22m of procurement savings and is on target to save £77m overall.
Bridgwater MP Ian Liddell-Grainger (Con) spoke in an adjournment debate in the Commons on Tuesday and described the deal as a "classic example of how not to do public procurement".
In his speech, Mr Liddell-Grainger highlighted the council's decision to use £2.7m from its contingency fund to deal with a Southwest One overspend.
And he said the council could also be obliged to make further payouts in the future.
He said: "If public spending remains at current levels then Somerset will have to fork out £2.7million every year for the next five years.
"That's 13 and a half million pounds."
The dispute centres on the company's procurement of services for the council.
But while the amount of work undertaken by the firm has fallen due to spending cuts, the council has to keep up payments due to contractual obligations.
Southwest One is also taking legal action against Somerset County Council - another issue that was brought up by the Bridgwater MP in his speech.
He said: "Southwest One, just to rub more salt into it, are trying to extract more money from Somerset by suing them.
"On September 27th, five years after the day the contract was signed, Somerset could legally terminate the whole mad thing, but the price of quitting is so high, we're stuck."
Southwest One said it was taking legal action over procurement [the amount of work it is asked to do by the council] and what payments it was entitled to.
A spokesman for Southwest One said: "Throughout the course of the contract, Southwest One has secured procurement savings that amount to £22 million which have been approved by all partners, with contracts in place to deliver a further £71 million of savings."
Somerset County Council has declined to comment over the MP's speech.