The abolition of a primary care trust and the onset of austerity torpedoed plans by Herefordshire Council to find large savings from a customer relations management system, auditors have found.
Accountant Grant Thornton audited the project after a whistleblower raised concerns about the system’s procurement and subsequent use.
Its report, due to go to Herefordshire’s audit committee next week, found no impropriety in the procurement.
But auditors said the council had failed to realise the planned £1.6m of savings because the system was not fully implemented and “the world changed” by the time it went live in December 2011.
Auditors found it “difficult to gauge whether the £1m spent on the project provided value for money”.
They added: “It is unlikely that CRM delivered all of the costs savings on which the business case was premised and the system is possibly over-engineered for its current use.”
The business case was “very ambitious and not fully owned by all parts of the council [and] the estimated cashable savings of £1.6m identified were not supported by robust analysis”, Grant Thornton found.
It proposed a five-point action plan to the council, including that any future major project should have “detailed input from the finance department around the projected costs and benefits of the business case”.
The council merged with Herefordshire Primary Care Trust in 2008 in the first such linkage of its kind.
The management system had been intended to serve the PCT. But that body was abolished after the Health and Social Care Act 2012 became law and “the successor CCG did not wish to be included within the joint arrangements”, Grant Thornton found.
Herefordshire has designed the system before the onset of austerity, which meant it “could no longer fund the full implementation of the project and the back-office savings which were supposed to be delivered by CRM were probably delivered by other means”, auditors said.
It had also adopted a business model where the council sought to meet all customer demand, but by the time the CRM was working had “changed to one of seeking to constrain demand and enable self-service where practicable”.
A Herefordshire statement said: “Herefordshire Council is satisfied with the findings in the Grant Thornton report, which suggest that there was no impropriety around the procurement process and that an action plan is in place to address any identified improvement actions.”