MP's anger over services company

Mr Liddell-Grainger said the deal was too secret

An MP has told the Commons he believes public money is being "misappropriated" with a company running public services in Somerset.

The company, Southwest One, was created to run administration services for Somerset and Taunton Deane councils.

Ian Liddell-Grainger, Tory MP for Bridgwater, questioned how the deal was set up. He said it was shrouded in secrecy and he "feared corruption".

Southwest One said the deal would demonstrate value for money.

Its chief executive, Richard Jones, added: "The public procurement process was robust and challenging. We were subject to various levels of scrutiny.

"External lawyers were appointed by the authorities to provide advice and guidance that all the procurement rules were followed."

Southwest One is an outfit born in secrecy and reliant upon secrecy Ian Liddel-Grainger, MP

Mr Liddell-Grainger's allegations were also rejected by Somerset County Council, which said they were "rubbish".

But local government union Unison backed the MP.

Some 800 staff from the two councils working in areas such as human resources, IT and finance will become employees of Southwest One, at a cost of £400m over 10 years.

Avon and Somerset Police Authority has also signed up to the scheme, in a deal worth £185m over 10 years and involving about 600 staff.

Mr Jones added: "A contract [sic] between Southwest One, Somerset, Taunton and Avon and Somerset Police have been reviewed and scrutinised by responsible officials from all the organisations.

"They are robust and subject to monthly performance reporting.

"We are contractually obliged to provide services to levels agreed in the contracts.

"These assure improving performance from the services which will be the responsibility of Southwest One."

'Real concerns'

Mr Liddell-Grainger said: "The National Audit Office has real concerns about Shared Service Partnerships (SSPs) like Southwest One.

"They published a report in January which said: 'Councils should only deliver services through SSPs if they are prepared to manage them effectively'.

"Southwest One is an outfit born in secrecy and reliant upon secrecy.

"Partnerships like this are a high-risk for the public purse unless there is robust evaluation, monitoring and control."

He called for all such arrangements to be subject to an independent review reporting directly to the Audit Commission and Parliament.

Southwest One is run by computer giant IBM, which has a 75% shareholding.

The government asked the MP to present any evidence of a failure to follow proper procedure to the district auditor.