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By | Kable 13th December 2010 10:09

Southwest One misses savings target

Slimmed down council services take a bite out of outsourcing savings

Somerset CC has confirmed that it is likely to save less than anticipated from its outsourcing deal with IBM due to the "slimming down" of council services.

Southwest One, a joint venture between Somerset, Taunton Deane BC, Avon and Somerset Police and IBM, was expected to save the council £172m over seven years, but Somerset said this is now unlikely due to cuts.

A spokesperson for Somerset told GC News: "Somerset CC paid £48m towards the set-up of the joint venture contract of Southwest One. We currently have £4m savings in the bank and a further £18m expected in the future.

"We're aiming to save £172m over the whole seven-year contract, but with the council slimming down, less work is being outsourced to Southwest One, so it will be less than that."

An exact figure of the decrease in anticipated savings has not been disclosed by the authority, however, a spokesperson said media reports quoting a figure of £30m were inaccurate.

A review into Southwest One was launched earlier this year by the controlling Conservative group and the opposition Liberal Democrats after the venture declared more than £2m worth of losses in 2008. At the time, Somerset defended the "small loss" stating that it was projected, and that the venture would break even in its seventh year.

This article was originally published at Kable.

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