A controversial venture set up to save taxpayers millions of pounds has lost £31 million and is so inflexible that it is making the job of finding savings even harder.
The Conservative leader of Somerset County Council, Councillor Ken Maddock, launched a blistering attack on the public-private partnership Southwest One at the council’s packed budget-fixing meeting yesterday.
The ill-fated initiative was set up in 2007 by the former Liberal Democrat administration with IBM, Avon & Somerset Police and Taunton Deane Borough Council, to provide backroom services.
But it has saved the council only £10 million of the £50million it was originally projected to save by this stage of the ten-year contract.
It aims to save £150 million over the full ten years. The company’s losses are borne by IBM. Despite the disastrous South West One partnership, Mr Maddock has admitted the council is looking at further private sector partnerships.
At the meeting the council froze its element of the council tax and cut £24 million from its budget, including savings on support for older people and the disabled, and slashed cash for 35 bus routes.
The council has said that its need to cut costs is due to a cut in Government funding but Mr Maddock was also scathing in his criticism of Southwest One. He said: “As an administration we inherited a partnership that promised a huge amount, but it was not delivering.
"Southwest One’s accounts year on year show losses, staggering losses just published of £31 million, and failures to hit modest savings targets. We have bent over backwards to try to make this partnership work.
"But we have to state clearly that our primary duty in looking after the public’s hard earned money is to make sure we get the best possible deals, that we get the best possible value for the public’s money.
“I have to say that Southwest One is failing this test. We are currently looking at all our services and all our contracts to see whether we are doing the best we can for our customers, whether we are providing the best possible services for our customers and at the best possible prices for our customers.
“We need a council that can cope with future government cuts and rising demand.
“Sadly, Southwest One is failing. It is failing to deliver promised savings; failing to cope with a changing financial landscape; failing to be flexible enough to adapt in challenging times and provide the best possible value for money.
“To make up for this failure, we will now accelerate our extensive review of everything that the council does.
“Almost half our most vital services are carried out by private sector or not for profit organisations – we will look to increase this where appropriate. We will encourage social enterprises, partnerships, communities and voluntary groups to get more involved in what we do.”
Mr Maddock stressed that his criticism was not aimed at staff working for the company but at the company itself.
Bridgwater MP Ian Liddell-Grainger, who is one of Southwest One’s sternest critics said: “Well done, Ken. He has been saying what I have been saying for the last five years.”
South West One did not reply to requests for comment.