Services which were controversially transferred from Somerset CC to a joint venture five years’ ago are to move back to the council after a long-running dispute was resolved.
Somerset has warned that “disruption may occur” as it takes back about 100 staff and several back office services from its own joint venture company, Southwest One, following months of negotiations over disputed payments.
The council is also set to make an undisclosed settlement payment to the joint venture it set up with IBM and a number of other local public bodies, although Somerset said this was “substantially lower” than the amount which had been claimed by Southwest One.
Back in September, following months of wrangling, Southwest One announced it was suing Somerset over non payment while Somerset said it was ready to make a counter claim about service levels.
However, in a statement this week the pair showed a united front and they were now focused on repairing their relations.
“Southwest One and Somerset CC can confirm the action concerning strategic procurement services has been successfully resolved,” they said.
“Both parties will now focus on continuing to build their long term partnership as Southwest One evolves and delivers services to Somerset and the other joint venture partners.”
Much of the dispute resolution agreement is under wraps because it relates to the business affairs of Southwest One and legally privileged advice, according to council papers.
However, it has been revealed that about 100 staff are set to return to the employment of Somerset over the coming financial year. A number of employees hired directly by Southwest One since the contract was signed in 2007 would also transfer to council employment. Around 250 staff will remain with Southwest One.
Services returning to Somerset include strategic and operational procurement, estates management, strategic management of IT including the council’s website, and some aspects of facilities management.
Southwest One will continue to run areas such as customer contact services as well as some elements of finance, HR, ICT, transactional procurement and traded services.
There will also be a reduction in the amount Somerset pays to Southwest One, but details of these savings have been kept confidential, as has the size of a settlement payment to the company.
Somerset papers state: “The agreement includes a settlement payment to [Southwest One] which is substantially lower than the claim against [Somerset] and releases payments to [Southwest One] that were held by [Somerset] as part of the dispute.”
The same documents warn there could be some risks and disruption associated with the transfer of staff and services “due to SAP [computer system] changes required”. It adds: “Despite all efforts to mitigate risks to services, it is possible that some disruption may occur.”
The council also notes the dispute had been “extremely difficult” for the other partners in the joint venture, Taunton Deane BC and Avon & Somerset Police, because they could not be kept informed of progress.
However, Somerset said the changes agreed sought to minimise the impact on partners. “An assessment was also carried out of the extent to which services are truly ‘shared’,” the papers said. “Wherever possible, the ‘shared services’ element has been unaffected by the agreed contract changes.”
Meanwhile Cornwall Council’s leadership signed a scaled down joint venture deal with BT after a much larger project was opposed by councillors.
The ten year deal signed on Wednesday is predicted to save £17.6m and covers ICT support, telehealth and telecare, document management, invoice processing, payroll and employment support.
The original specification of the contract also included other services such as billing and collection of council tax and business rates, assessments for housing, council tax and free school meals, libraries and one stop shops.