Avon and Somerset police: Private deal will save £35m
Avon and Somerset police claims it will save £35 million over the next 10 years as part of a controversial deal with a private company.
Southwest One is a group made up of the police, computer giant IBM, Somerset County Council and Taunton Deane Borough Council.
It was set up last year to take over the running of administrative duties for the three authorities like payroll, ordering goods and paying suppliers, after IBM said it could deliver the same services for a cheaper rate.
When the group's first accounts were published last month, they showed a pre-tax loss of £2.5 million in the first year of operation.
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Avon and Somerset police Chief Superintendent Tracy Hayler spoke to the Evening Post about this, and the savings the force hopes to make.
She says the deal allows the police to reduce its running costs by £18 million over 10 years, 10 per cent less than the current £180 million bill.
A further £15 million can be saved by buying goods and services through Southwest One, which covers areas like catering, and the final £2 million comes from using modern technology and reducing bureaucracy.
Chief Supt Hayler said: "Southwest One has taken on a number of our staff to run services more cheaply than we can. All the staff are guaranteed a job for the 10 years of the contract, and IBM will invoke a financial penalty if they don't deliver on our expectations.
"The company was never planning to make a profit in the early years, you have got all the costs of starting this up, bringing services together and implementing new technology. This is absolutely not a surprise."
Although current staff are guaranteed a job for the length of the contract, if they leave they will not necessarily be replaced.
Chief Supt Hayler said the important thing was that the £35 million savings would allow the force to spend more money elsewhere.
Areas include replacing expensive Victorian buildings, opening police posts in rural areas and working on new ways to tackle re-offending.
The Southwest One contract is not available to the public, and the figures for both the amount of savings and the level of taxpayer funded investment have varied wildly.
According to the latest figures the contract will cost the tax payer £585 million over the next 10 years, but previously Southwest One said it was £400 million. The organisation has declined an opportunity from the Post to explain why the figure has gone up so much, or to explain whether the increased cost of the contract would affect the level of money saved.
Reported savings claims have varied from £200 million to £376 million.
Normally any body that uses taxpayers' money would be subject to scrutiny by the Freedom of Information Act. But because it was set up as a private limited company Southwest One can avoid the reach of the act, which was intended to make the public aware of how their money was being spent.
The £585 million figure was revealed in the company accounts. IBM will bear the £2.5 million pre-tax loss so taxpayers won't lose out, and the organisation said losses in the first few years are to be expected.
The announcement came as chief executive Richard Jones, also a senior IBM executive, stepped down from Southwest One.
Bridgwater MP Ian Liddell- Grainger has long criticised Southwest One for alleged secrecy, and has raised questions about its formation in Parliament.