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Tories pull out of £60m Axon deal
Thursday 13th November 2008, 11:45AM GMT.
A deal to spend £60 million of taxpayers’ cash on the biggest-ever shake-up of Wolverhampton City Council will be called off, the Express & Star can reveal today.
The ruling Tory group is pulling out of the 10-year deal with private sector firm Axon because it cannot afford it.
The decision will cost taxpayers an estimated £8 million.
But the opposition Labour group, which started the ball rolling on it before losing control of the authority in May, today warned severing ties could end up costing millions more if Axon takes legal action.
The 1,000-page contract has not been signed but Surrey-based Axon, which specialises in saving councils money, deployed 80 workers to the Civic Centre in May to begin the revamp.
Seventeen still remain, although they are now expected to be stood down.
The deal involved shedding jobs and introducing a new computer system to deal with complaints and queries from the public which Axon expected would save the authority £43 million by 2018 and more in later years.
Three hundred redundancies already announced by the end of April as part of Axon’s cost-cutting will still go ahead.
Confirming the decision to back out, council leader Neville Patten, pictured, who has admitted taxpayers could not afford it, said: “It will be the recommendation of the Conservative group that we should not proceed with the proposed contract with Axon Solutions.
“The group has come to this conclusion after careful consideration on the future of the partnership. I would like to take this opportunity that this conclusion in no way reflects any criticism of Axon,” he added.
The decision will go before a meeting of the full council on December 17 for approval.
The Liberal Democrats, in an alliance with the Tories to run the authority, said it would vote with the Conservative group to scrap the deal. Finance spokesman Malcolm Gwinnett said: “We will not stand in their way.”
The up-front payments being demanded by Axon to get the deal off the ground totalled £18 million over the next three years, which the council said it could not afford.
The authority is striving to limit council tax rises but is battling a cash crisis which it blames on the previous Labour administration. This is denied.
Its books are £5 million short for the current financial year after an expected shares dividend from Birmingham Airport, included in the budget inherited from Labour, failed to materialise.
Labour finance spokesman Councillor Andrew Johnson said: “The ending will do irreparable damage to the commercial reputation of the council. We have considerable sympathy with Axon which entered into the partnership in good faith. We would not be surprised if the firm takes legal action against the council which will cost taxpayers even more.”
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Labour have some audacity in complaining about this. It’s their mismanagement that means the council’s in such trouble now!
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Im sorry, what legal action? There was already a contract in place, regardless of whether it was signed, both the council and axon were acting as if it was already signed, so the penalty for pulling out is the stated £8m in the contract, no more, no less.
Once again Labour trying to frighten voters and palm off their doing on others. Labour is a disgrace and all their decisions made whilst in power at Wton Council should be investigated.
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If Axon really felt the savings they’d be able to achieve were possible there would have been no problem in them giving WCC the cash up front. I can’t blame the Conservatives (for once) for pulling out of the deal. It’s an unusual firm who says they’ll save you millions then asks for millions of pounds from you up front in return!
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labour leave a black hole in the accounts decide to bring in a management team to sort out the mess and then because the current council cannot afford to go ahead suggest Axon takes legal action!! Come on Labour get real
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Jingle, Jingle, Jingle! What is that noise people of Wolverhampton? It is not Father Christmas! It is yet more of your hard earned Council Tax cash being poured down the drain by WCC!
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This scheme with AXON (costing +£100m) doesn’t seem to be saving much at all. This was what led to our wasteful Labour council scraping every PC over 12 months old costing £3.5m! What a waste of money!
Shouldn’t the E&s Headline read “Tories pull out of expensive, unfunded AXON deal agreed by Labour”.
The Labour councillors have left the administration in a mess and it will take some serious cleaning up to put it right.
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Why spend 60million of tax payers money to make a saving of 43million anyway during the 10year contract?!?
I’m sure there are cheaper ways of saving such money. Not using consultants, not using top heavy (over paid) management structure. Why cant we stop creating extra jobs where you pay some dumb people lots of money to look into ways of saving money!!! It’s beyond belief what has become of modern day ‘Great’ Britian.
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the only thing labour are good at is wasting money
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Any allready in-debt Council (£750m with £50m borrowing for this year?) want to spend more to save less! BARMY ARMY!
2/3 rds of jobs are public sector – good Old Labour!
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There only a human manpower consulting firm. The same kind of people trying to put our NHS right and look at that? A good management team in the council should be able to put things right if they can find one that is.
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I’m sorry, but blame for this mess doesn’t rest with either Labour or the Tory alliance. At then end of the day, it was the Council’s executive management team that recommended this idea. The Councillors only vote on whats put before them based on the evidence thats there. Labour or Tory, if your shown somethings going to be great by people who have been trusted with such responsibility, you will take their word.
The failure of this deal isn’t down to Labour or Tories, its down to the Chief Exec and his underling executives who put it together. They’re the one’s to blame.
How bad do they have to get before central government wades in and takes control from the obviously failing management?
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same old same old Cannot wait to leave this hole of a ‘city’
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This is a somewhat disingenuous article again – aspects are true but the statement that projected savings would only be £43m by 2018 is clearly not true. The benefits were far greater than that or the project would never have been entertained. As for AXON charging up-front costs that should have been better explained also – of course, you do have an agenda.
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Well said ZeElk, however, its the councillors who have the final say and common sense should tell them paying someone this much money in order to save money does not make sense.
Im certain similar savings could be achieved without resorting to hired-guns. These consultancy firms are all a joke, they do sod all and yet local authorities and even central government flock to them. I think the public accounts committee’s should be looking at who is running these firms and the links to councillors and MP’s.
At the very least this is incompetence of the highest order and action must be taken, this is public money being wasted, action has to be taken against the individuals responsible.
I call for the Express and Star to push the chief executive on this issue and show the public theyre real journalists, and not the useless hacks they appear to be with their badly written articles and serious lack of proof reading.
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Chris’s comments re AXON being just a Human manpower consulting firm is totally inaccurate. AXON are a Business Transformation company – all aspects of processes and this includes IT systems implementation.
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I like the way the “business friendly Tories” are now prepared to tear up contracts willynilly, and the “people friendly Labour party” are prepared to throw away heard earned tax money to consultants and management svengalis. The Lib-Dems are in bed with the Tories – there’s only The Green Party left to vote for these days…
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Social care, human capital and customer relations management. All on their web site. Think tank corporations who know more about your business needs than you do or so they think. see comments14
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I agree with Ze elk. Will the people who make the decisions, i.e. the Transormation Programme Director be held accountable for this fiasco. They’ll probably just be given a comfy job in the background. Also, i doubt whether the people making these decisions do not live in Wolverhampton, thus do not feel the consequences of their actions.
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It all lies at the feet of the C.E. He is the man who has constructed this shower of a deal and he should be the one to have his knuckles rapped.
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There’s certainly a huge element of truth in the fact that senior Council officers (specifically all of the Corporate Management team, including the Transformation Director but with the exception of Sarah Norman) were the ones who pushed for the programme and who advises members on all sides. Heads should roll. HOwever, it’s also true that all the things Councillors take credit for are actually done by these Officers too. So if they’re happy to take the credit when things go well it’s right that they should take the blame when things go badly too.
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8 Million pounds – wonder if Axon are connected to Accenture? What an utter waste of money.
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What senior officers have done here is jumped of a financial cliff with a parachute and hasn’t had enough time to pull the ripcord. The results have been clearly fatal.
The deal would have probably save a lot of money and delivered significant improvements. But at the end of the day, the rule of business is never run out of money and that’s what’s happened.
For the council, it was the ‘last change saloon’ financially – it’s been proved that they couldn’t even afford that! What will happen to all the outdated computer systems which will imminently fail? The council is staring into oblivion if they do!
Permanent and significant changes could have been made however, it looks like ‘back to square one’ of crudely cutting budgets, lopping head counts and reducing services. The latter isn’t what needs to happen in a recession. Vulnerable people need support.
Head should roll for this dire mess and the government should step in to run things!
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jimmi you want the government to step in how many millions would they waste
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I work at the Council & my computer was OK. What needs to be changed are the crackpot ideas that the management invent on an almost daily basis. If I had my own business I wouldn’t run it the way it’s run at Wolverhampton City Council, it’s just too weird a system!
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Arrrrgggh!
Anyone wmployed by wolves council should have to take an IQ test. What a mess, however it ends up, we’re the mugs paying for it. Ooh I could burst a blood vessle I’m so fed up with all the political messing about. I Just want the bins emptying and the sewers cleaning, no pot holes in the road and eco street lights. Not much really?
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the council’s corporate management team are paid well to ensure Council services run effectively. why are outside consultants needed? Also Express & Star should ask the Council how much its Agency staff are costing!
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This gets more anoying as the comments go on from Councillors and public alike.
The current IT systems are NOT about to fail! The mainframe system could go on for years and years if necessary!
The key issue here is buiness proceses. The curent IT systems do not work well together and a lot of the interactivity is done by manual means. But it works and will continue to work until changed.
ONe of the tasks of the transformation programme was to intoduce a new IT system, to bring this together. The quoted system is one of the most expensive systems designed for multi national companies and not single site companies!!
Also how on earth did the requirement for Vist come about? I understand the requirement for new desktop hardware so that there is a common platform but the OS needs to be XP. All the curret systems run on XP and so do the future ones. There is NO logical, tehcnical or buisness driver for Vista other then the employment of a £500 a day consultant to line his pockets!!
Rather miffed – I should say so!
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Agree Vista would be a network nightmare and cost a fortune to implement. It would cause most of th enetworks to crash at the moment. Thye would need a permanent consultant.
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Maybe I’m reading too much into the current situation but this deal smacks of a last ditch effort by the Chief Exec. to try to stop the ex. controlling group (Labour) from getting egg on their faces after their 14 years of overborrowing and overspending. Nobody expected the Lib/Con Coalition to gain control as soon as it did and now they have gone public with their financial findings.
Who can blame them?
If you find that a ship is sinking, you need to fix the hole before bailing out the water.
Surely with the amount our council were charging me for rent and council tax there should have been some cash left in the kitty!
The Chief Exec. is guilty of trying to cover up the Labour swamp of incompetence and the Labour ex. controlling group are just guilty.
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