Major Birmingham City Council contracts should be independently audited to avoid a repeat of the costly off-shoring jobs to India fiasco, one of the city's mayor hopefuls has claimed.
Sion Simon, the former Erdington Labour MP who is hoping to become Birmingham's first elected mayor, made his call after it was revealed the council’s U-turn on overseas jobs last year had cost the taxpayer £2.176 million in compensation to IT contractor Capita.
The council will also have to find a further £10 million in savings over the next decade to make up the promised savings.
Mr Simon accused the council of ‘being asleep at the wheel’ during negotiations with the firm and believes that outside audit may have prevented such a costly political mistake.
His colleagues in the council’s Labour group have already promised a complete review of the £1 billion contract should they take control of the City Council in May.
The former Government minister, who resigned from Parliament in 2010 to campaign for an elected mayor, said: “The revelation that the council taxpayers of Birmingham will be forced to shell out more than £2 million pounds in compensation to Capita after the council leadership changed its mind about off shoring jobs to India disgraces both parties.
“Councillors and senior officers were asleep at the wheel during these contract negotiations and were either too reckless or too naive in agreeing to such a move.
"But Capita does not get off scot-free. We need a full cost breakdown to see exactly what we are supposed to be compensating them for.”
He added that if elected mayor he would ensure all major contracts are checked by an independent auditor.
“I propose having all the council’s major outsourced contracts independently audited to ensure we are genuinely getting value for money.
"They should be periodically reviewed too. We need to crack the whip a lot harder with big contractors who are often making vast sums of money on the public purse,” he added.
In November Coun Barry Henley (Lab, Brandwood) described the Service Birmingham deal as a ‘boondoggle’ – a large scale corporate project which, even though the realise that the savings will never be achieved, the key personnel plough on regardless rather than admit failure to their masters.
Coun Henley said: “Generally there is an aspect of going through the motions – for example, continuing research and development – as long as funds are available to keep paying the researchers’ and executives’ salaries.
“The situation can be allowed to continue for what seems like unreasonably long periods, as senior management are often reluctant to admit that they allowed a failed project to go on for so long.”
He added that parts of the project may work, but never to the extent that they recoup the development costs or meet the promised savings.
Coun Henley will doubtless be at the forefront of any such review under a future Labour administration.
Meanwhile the City Council leadership, which has been running the Service Birmingham and business transformation project with Capita since 2005 claims they are on track to achieve the promised savings.