Mendips back office deal in trouble
We have often written about the wretched track record of Somerset councils with shared service contracts. This is something that forms one of the bedrocks of the Stronger Somerset plan. There would be two unitary councils in the plan. However they will get together to have a shared services company to provide back office functions.
So it is interesting today to learn of the existing shared service contract that Mendip District Council has. Along with Havant, South Oxfordshire, Hart and Vale of White Horse. They have a shared contract with Capita to provide a range of back office and procurement functions. The deal was started off in 2016 as a 9 year, £140m contract.
Now they have signed a contract variation with Capita which dramatically reduces the scope of the deal. The It service scope will be reduced. Procurement will be taken back in house. Most exchequer services will also come back in house. Bear in mind that this is the second time this year the scope has been reduced. In March HR, Licensing and payroll services were all reduced. 34 council staff moved from Capita back to their respective Districts.
The contract has been riddled with problems. Although Mendip have consistently denied that the contract is not working. It clearly is not working. It would be poor business practise to reduce the scope of a contract if it was delivering successfully.
This does not bode well for the sort of shared contract services proposed for the future governance of Somerset.
We understand that the new pared back contract with Capita will come into effect from 1 January 2021