A £450m joint venture between two West Country councils and IBM could be the first of its kind in the country if a local police authority also signs up to the scheme.

The new company, called Southwest One, will focus on improving the delivery of key IT services, including design, finance and human resources, to Somerset County Council (SCC) and Taunton Deane Borough Council (TDBC).

And if Avon and Somerset Police Authority goes ahead with its plans to join, the councils claim it will be the UK’s first cross-sector shared service partnership.

Southwest One will improve services across the region by being open to other local organisations, said SCC corporate director of resources Roger Kershaw.

“Small district councils that could never afford a system such as SAP will be able to get it at a comparatively lower price,” he said.

“And they will be able to draw down the services they need, without having to go through the lengthy, expensive procurement process.”

Last week, about 650 staff transferred to the newly-formed company, following the first wave of 50 IT staff who moved at the start of last month. About 100 full-time IBM staff are also now at the headquarters in Taunton, to be joined by another 100 next year.

Between them, the two councils stand to reduce their procurement spend by £140m over 10 years. Individually, SCC will cut overall costs by £175m, and TDBC by £15m.
Somerset’s savings will help the council meet central government efficiency targets and fund its wider business transformation programme.

“As a public sector body, we’re facing a tight fiscal regime,” said Kershaw.

“Southwest One will enable us to pay for world-class systems, keep council tax low and invest in property, staff and customer access services.”

The first stage of the scheme is an implementation of SAP and a new customer relationship management system. More complex plans for mobile working and hotdesking will follow.

The progress of the Southwest One initiative is being watched closely by the Cabinet Office’s shared services team, to see what lessons can be learned for other public sector areas, said Kershaw.