Lawyers called in over Axon pay-off

Lawyers have begun an investigation into a bungled deal between a Black Country council and consultants that cost taxpayers more than £7 million in compensation.

Wolverhampton City Council has called in Wragge and Co to look into its axed partnership and subsequent settlement with Axon Solutions.

The council's deal with Axon to replace computer systems and revolutionise customer services was meant to cost £68m over 10 years and lead to savings of £126.6m.

But it was scrapped in 2008 after council bosses decided they could not afford it and raised concerns that it would not deliver the savings they originally thought.

Axon had to be paid off with a £7.1m out of court settlement. The Tory-Lib Dem coalition in charge of the council said taxpayers deserved answers.

Steve Boyes, the council's director for sustainable communities who is leading the review, said: "International law firm Wragge and Co have been appointed to undertake the review which will be conducted in two parts.

"Work started on the first part in early summer by two members of the company who are scoping the review to determine which officers and councillors are to be involved, proposed timescales and costs and how and when the review will be published."

The deal was originally set up under the former Labour administration which lost control of the council in 2008. Richard Carr, the council's former chief executive, recommended the deal went ahead. He now works for Central Bedfordshire Council.

The story began in March 2008 with a report to the former Labour cabinet recommending the Surrey-based firm as the one to radically change the council's customer services and save taxpayers £126.6 million over 10 years.

But the final saving to the council is just £10 million, officers believe. Council officers said a number of risks spotted early on in the deal had not been resolved. Shortly after coming to power the Tories, backed by the Lib Dems, decided to scrap the deal.

Tory leader Councillor Neville Patten said: "It is important that this review is done because we believe there were mistakes made when this deal was being set up.

"We all have to make sure lessons are learned so it cannot happen again and cost the people of Wolverhampton millions."

The compensation pay off was shrouded in secrecy with the vote taken behind closed doors last December - it was the first time in the history of the authority that the public was shut out of a meeting of the full council.

The compensation figure was only revealed after the Express & Star saw a leaked copy of the report.