Councils sign £400m shared services deal with IBM

Two southwestern local authorities have signed a £400m deal to create a shared services joint venture with IBM.

The 10-year venture between Somerset County Council and Taunton Deane Borough Council is called Southwest One and will provide shared services to half a million residents and include a managed shared IT infrastructure for both councils.

Southwest One will be run by staff seconded from both the councils as well as IBM. It will deliver shared IT, finance, human resources, customer services, facilities management, property services and procurement services. In addition it will supply revenue and benefits services to Taunton Deane Borough Council.

The joint venture will also be open to more than 30 other public sector organisations in the region, which will be able to take advantage of the shared services on offer.

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The first could be Avon and Somerset Constabulary, which will make a decision next month on whether to join the Southwest One enterprise.

Jill Shortland, leader of Somerset County Council said the joint venture will help ease pressure on local government budgets.

She said in a statement: "This partnership is absolutely essential to both organisations in our attempts to inject funding into frontline services in the prevailing climate of huge public and government expectation."

UK public sector spending on shared services is tipped to rocket from $311m to $1.27bn over the next five years, according to a recent report by analyst Datamonitor.