Wolverhampton Council facing £690k bill for computer fees

Cash-strapped Wolverhampton City Council is to spend more than £690,000 on consultants and lawyers as part of a £2.5 million overhaul of its computer system.

The council's outdated mainframe computer has only two years left before it reaches the end of its operational life.

Documents released following a behind closed doors meeting of the Conservative- Liberal Democrat cabinet reveal that £694,139 is to be spent on the first stages and the legal costs.

A temporary manager will also be employed until the end of July at a cost of £37,000. Lawyers fees alone will come to £150,000.

The cost was defended today by the council's finance chief Councillor Wendy Thompson. She said: "We are dealing with a contract that may be worth millions of pounds because it is the mainframe computer.

"In a city of 230,000 people we have to improve our services and it is vital that they work.

"The lawyers, Trowers and Hamlin, deal with 200 councils and they have a huge amount of experience."

Councillor Thompson said it was "vital" the council avoided another "fiasco" such as the bungled £68m deal with consultancy firm Axon, which had to be paid off with £7.1m of taxpayers' money.

That deal was meant to last 10 years and eventually save tens of millions of pounds by revolutionising computers and customer service. It was set up under the previous Labour administration but scrapped by the Tories after they came to power in 2008 and became concerned that the savings would only be £10m after spending £48m.

The council is currently trying to save £27m over two years.

Consultants KPMG will be appointed advisers at a cost of £217,139 for an initial 200 days of work.

Potential future work could be ordered up to a total value of £290,000.

The current system has been in place since 1992 and its shelf life expires in 2012.

A supplier will be sought who can offer a system that uses the least amount of energy in order to keep fuel bills low.

The payout to Axon was made in December last year, more than a year after the deal was scrapped. It would have led to 300 redundancies as the council used the new computer system to handle inquiries and complaints from city residents.

The Tories believe the new system will provide better value for money than the one proposed under the Axon deal. They have promised it will not be "an extravagance".

An investigation is to get under way to find out what went wrong with the Axon deal, with top lawyers heading the inquiry.

A separate top level inquiry is also due to be held into how foreign workers were able to be employed at the council without proof of entitlement to work in the UK.