18 October 2007
Two Somerset councils have struck a deal with IBM to create one of the largest shared service deals in the public sector.
Somerset County Council and Borough Council Taunton Deane have created joint venture Southwest One with the IT firm. It is estimated it will create over £140 million in procurement savings in 10 years.
The deal will also cover HR, property and facilities management, IT infrastructure and some revenue and school services. It contains a framework agreement that will allow more than 30 public sector organisations to use it.
In response to concerns that it was handing power to the private sector, Roger Kershaw, the councils' lead on the project, said: "There are KPIs and an agreed set of targets to ensure IBM meets our objectives. It will be penalised heavily if it doesn't deliver."
Jill Shortland, leader of Somerset County Council, said all buyers have been seconded into the joint venture. There will be no redundancies and he procurement work is guaranteed for 10 years.
When asked how the venture would improve procurement, she said: "The councils' procurement teams work effectively and efficiently, but they don't have the expertise of world renowned firms."
Richard Jones, interim CEO of Southwest One and vice-president of IBM's public sector business, said it will introduce category managers to provide more focus on certain areas of spend and implement e-procurement software. He added new career structures may see some council buyers joining IBM.