Council and outsourcing provider settle multi-million pound dispute

A multi-million pound dispute between a county council and an outsourcing provider which it part owns has been settled.

Southwest One launched legal action against Somerset County Council last year over the provision of strategic procurement services.

The outsourcing company claimed at the time to have secured £22m in savings through the course of its contract and that contracts were secured to deliver a further £71m in savings.

However, the local authority rejected the claims and said it would make counter-claims where it believed it had suffered losses.

This week the two organisations revealed that the case had been settled. In a joint statement they said: “Southwest One and Somerset County Council can confirm the action concerning Strategic Procurement Services has been successfully resolved.

"Both parties will now focus on continuing to build their long term partnership as Southwest One evolves and delivers services to Somerset County Council and the other joint venture partners."

According to a report in This is Somerset, Somerset’s Leader, Cllr John Osman, has welcomed the settlement.

He said: “The agreement sees payment of Southwest One fees which we have been withholding for a mutually agreed sum. Furthermore key services such as procurement and property management will return to the council.

“Most importantly the cancelling of the gainshare agreement will save Somerset County Council residents millions of pounds in the future as those sums can now be kept by the council.”