David Huxtable response to UNITE’S PQT at Full Council – 18 February 2015‏


Question 1:


2020 Vision and Medium Term Financial Plan 2015/16 to 2017/18 (Item 6 Paper A) What steps and measures is SCC taking to address the difference between the Department for Communities and Local Government (DCLG) spending power increase (+0.4%) for Somerset County Council with the 2020 Vision and MTFP (P25 http://www.somerset.gov.uk/policies-and-plans/plans/medium-term-financial-plan/ ) assessment of a reduction in spending power (-3.7%)?”


Answer 1:


The DCLG spending power calculations bear no resemblance to what local councils have to manage in terms of grant reduction.  We have made representations in the past to MPs and DCLG senior figures that these are unhelpful and misleading.

The LGA and the County Treasurers’ Society have again this year criticised the use of the spending power comparison because it includes grants that are not given to councils but are given to the health sector.



Question 2:


Transatlantic Trade and Investment Partnership (TTIP)

Reference was made to the TTIP at the last County Council meeting (19th November). Does the Council agree that “The trade deal is being negotiated behind closed doors, between EU bureaucrats and delegates from the United States. It is the largest bilateral trade deal ever negotiated and threatens to make the ongoing privatisation of the NHS, and presumably local government and other public services irreversible by giving the profits of corporations precedence over national lawmakers. TTIP could grant American multinationals, or any firm with American investors, the power to sue the government (and other public authorities?) if it ever attempted to take privatised health (and Local Government?) services back into public ownership.”?


Answer 2:


The Council does not have a view on this.



Question 3:


The Future of Southwest One (SW0) 

The media has reported that Avon and Somerset Police and Wiltshire Police are moving towards sharing services (IT, HR and payroll etc.) 


a)    Was Somerset County Council (as a partner in the Joint Venture Company-Somerset County Council (SCC), Taunton Deane Borough Council (TDBC), Police and Crime Commissioner for Avon and Somerset Constabulary (PCC) and IBM – known as Southwest One) consulted?

b)    Has this been included in the corporate risk log?

c)    What steps are being taken to ensure there is no detriment to Somerset County Council?

d)    What progress is being made to bring back (insource) services from SW0 as the contract ends in 2017?

e)    When will services (currently dependent on Southwest One) be able to plan effectively for the period leading up to 2017 and beyond?  


Answer 3:


SCC were notified by the Police and Crime Commissioner (PCC),  but not formally consulted that Avon and Somerset Police (ASP) were engaged in discussions with Wiltshire Police regarding the formation of a strategic partnership for the delivery of back office services.  However we are now talking to ASP to better understand any impacts before we can undertake any meaningful risk assessments, recognising that the discussions are at a relatively early stage of development.

Because of the scale and complexity of the arrangements, SCC has already started to plan for the end of the contract with Southwest One and the Partners.  All options are being explored by SCC.  Nothing has been formally agreed or ruled out at this stage.

At the appropriate time, the end of contract options will go through the appropriate governance arrangements and we will discuss them with key stakeholders including staff, partners and key SWO customers such as schools.



Question 4:


IBM, Leicester City Council and Southwest One 

It was reported in the media (30th January 2015) “Technology company IBM is to open a base in Leicester with the creation of 300 jobs over three years. It will be the first time the US firm has selected a UK site for one of its services centres.” (BBC News website)

a)    Did IBM consult Somerset County Council and Taunton Deane Borough Council about creating a service centre in Somerset? 

b)    Were similar claims (creating and working with universities and creating new jobs in Somerset) made during the ISiS programme (which led to the contract with IBM?) 

c)    Were the promises by IBM of economic development and creating new jobs (in Somerset) contractual? If contractual, (was it removed in subsequent post original contract variations?) then are IBM now in clear breach of contract and what steps can be taken?


Answer 4:


IBM proposed a series of potential initiatives around employment and economic development for Somerset as part of their original bid and some of these were included in the contract with SWO.  If SCC identified an actionable breach of contract it would take action to protect its position and follow due Council process.  In relation to IBM opening a base in Leicester, no discussions have been had between SCC and IBM.



Question 5:


This relates to Annual Report of the Cabinet Member for Resources (Paper 16 Item 16) – Southwest One

Section 2.9 states:” Since the return of services in 2013 the Client Team have continued to robustly manage Southwest with a continued focus on the ICT service to ensure value for money and improve the service performance of the contract for the County Council. SWO have had a significant number of KPI failures since, resulting in SCC having to serve warning notices to ensure an improvement to the ICT service.”

Can you please provide a list of the Key Performance Indicator (KPI) failures?


Answer 5:


Please see attached document in response to this question.



Question 6:


The latest Southwest One Company Accounts (signed off September 2014) 

In assessing whether the company is a going concern, the directors evaluated the detailed financial forecasts, assessed the company company’s liquidity requirements and they received….However, as part of this review the directors are aware that at the end of the contract life, the company is currently due to settle its inter-company loan balance with IBM, which at 31 December 2013 was £48.8 million (2012:£47.9 million). Currently it is felt that there are insufficient cash flows to be generated in the remainder of the contract to settle the loan balance.” 

a)    Can you clarify whether SCC will be liable for any of the inter-company loan balance with IBM as SCC is a Joint Venture Partner in SW0? 

b)    Did SWO borrow an additional £1 million pounds from IBM in 2013? 

c)    Is SW0 currently still trading because of “continued financial support from IBM United Kingdom Holdings Limited.”


Answer 6:


It is SCC’s view that it will not be liable for SWO’s inter-company loan balance with IBM.

The other matters are for the SWO Board and any information that SCC could provide would be limited to that contained in the published Accounts.  We suggest any questions regarding the Accounts are directed to the Company.


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