South Wales Evening Post - 30 January 2007
The latest financial health check on Swansea Council has thrown up more problems for the city's eGovernment scheme.
The annual audit report letter to Swansea Council has highlighted serious concerns over projected savings from the project. When the deal was signed in January 2006 council leaders said the contract would bring savings of £26 million.
So far just over a quarter of those savings have been identified as possible. That failure to hit targets has put the second phase, a dedicated phone line for council customers, in doubt.
The latest report from auditors PricewaterhouseCooper said: "When the council signed phase one of the eGovernment contract with Capgemini it expected to generate £26.2 million of savings over the first 10 years of the contract, off setting the implementation of the new hardware and software.
"To date, £7 million of these savings have been agreed as realisable by the council and Capgemini. Ongoing discussions are taking place between the two parties to agree the next phase of realisable savings. However there is a significant risk that the full amount of anticipated savings will not be realised."
The auditors go on to say that if no more savings could be identified the project would make a loss.
As well as the possible failure to hit targets in the eGovernment scheme, the auditors identified five other "significant financial pressures".
These include the cost of getting rid of waste in the county, paying for pensions and new legislation to provide equal pay deals for women.
The auditors warned Swansea Council that failure to meet the targets would have an impact on future budgets.
An outline financial plan is currently being drawn up by Swansea Council.
The auditor's report says: "A significant level of future resources available to the council is underpinned by the eGovernment programme savings. It is therefore essential to the plan that the council is certain that the predicted savings can be achieved.
"Other significant savings include those arising from falling school rolls and the Assembly efficiency targets.
"It is essential that the council monitors the risks to the plan and provides for contingencies."
