Outsourcing joint venture sues founder council in savings row

An outsourcing joint venture has launched legal proceedings against one of its founder councils in a row over payments for procurement savings.

In a statement Southwest One said its legal action against Somerset County Council related to an agreement covering the provision of strategic procurement services.

“Despite extensive efforts, Southwest One has been unable to resolve the matter satisfactorily and is now looking for the court to determine the issues in accordance with the agreed contractual terms,” it said.

“Southwest One complies with its contractual obligations, providing a robust service to all partners which includes the identification of substantial procurement savings.”

The joint venture argued that it had secured savings worth £22m throughout the course of the contract, and that contracts were in place to deliver a further £71m in savings.

But Somerset has rejected Southwest One’s claims and vowed to make counter-claims where it believed it had suffered losses.

The legal action follows failed attempts to settle the case through mediation and negotiation.

In a statement Somerset said: “We are in disagreement with Southwest One about the quality of the procurement service and what payments Southwest One is entitled to as a result of savings made by getting better deals through the joint venture.



“As set out in the terms of the contract, we had hoped we would be able to settle this issue through mediation and negotiation. It is now apparent that this will not be possible and it is disappointing that we are in the position of going to court.”

Somerset added: “It is paramount that we look after the best interests of tax payers and take action when standards of performance and quality are not being met.



“We will therefore robustly defend our position and make counter-claims where we believe we have suffered losses.”


Southwest One was set up as joint venture by Somerset, Taunton Deane Borough Council and IBM in October 2007. Avon and Somerset Police became a partner in March 2008.

It provides a range of services in addition to procurement, such as finance, ICT, property and human resources.

The 10-year contract was estimated to be worth approximately £500m.