The House of Commons will hear today that computer giant IBM offered dramatic extras including “true” broadband for nearly all Somerset residents within a year, when it bid for a contract to provide backroom services for two Somerset councils.
It also promised an annual boost to the local economy of £600 million, 400 jobs, a “virtual” university and an iconic headquarters.
Ian Liddell-Grainger, MP for Bridgwater and West Somerset, will tell MPs the “bizarre offers” were “fairy dust”.
He has secured an adjournment debate on the subject of South West One, the joint venture company set up between Somerset County Council, Taunton Deane Borough Council and Avon and Somerset Police. The debate will centre on procurement.
The company was set up in 2007 by the then Liberal Democrat administration of Somerset County Council with a 10-year contract to deliver £197 million savings. Five years on it has made total losses of £34 million and savings are millions of pounds behind original expectations.
Last week the County Council Cabinet agreed to pay South West One £2.7 million because the council has not generated enough business to qualify for a unitary charge reduction. Public spending restrictions mean the council may have to pay the sum every year of the final five years of the contract – a total of £13.5 million. And the council is also locked in a legal dispute with South West One over the level of savings, which could end in court.
Meanwhile, the council is working to deliver its own broadband project with the help of a large Government grant, £10 million of its own cash, and no help from IBM or South West One.
The new SAP computer system set up to help the company deliver savings on financial services, procurement and payrolling had serious teething problems.
Mr Liddell-Grainger is fiercely critical of the former Liberal Democrat leader, councillor Jill Shortland, current leader councillor Sam Crabb, former chief executive Alan Jones and former director of resources Roger Kershaw. South West One was set up with the backing of Conservative councillors but since the party came to power it has also been highly critical, condemning restrictive clauses which former Tory leader Ken Maddock said made making spending cuts more difficult.
South West One has continually been given a clean bill of health by the District Auditor, but last night Mr Liddell-Grainger said: “There is now ample evidence to prove that the whole auditing process was grossly inadequate. The background and operation of South West One should now be properly examined by the National Audit Office. Only then can we begin to believe in a happy ending to this sorry story.”
Somerset County Council said it could not comment because it is involved in a legal dispute with South West One.
South West One says it has secured procurement savings of £22 million which have been approved by all partners, with contracts in place to deliver a further £71 million savings, and is: “rightly proud” of the financial benefits, excellent overall service and improvements it has delivered.
IBM declined to comment.