Solihull-Severn Trent link off.(News)

Byline: Paul Dale

A planned pounds 150 million link-up between Solihull Council and Severn Trent, aimed at importing private sector thinking into the delivery of local authority services, has collapsed.

Solihull Council announced last night that year-long talks between the two organisations had failed to resolve outstanding financial issues. The proposed moneyspinning joint venture company would have provided payroll handling, billing and Internet-based services for Solihull Council, other West Midlands councils and the private sector.

Severn Trent beat 36 companies to become Solihull Council's preferred joint venture partner last year.

BT and W S Atkins were also on the short list.

The new company was to have been in business by Christmas2002, but negotiations between the two sides dragged on.

Katherine Kerswell, Solihull Council chief executive, said reasons of 'commercial confidentiality' prevented her from explaining why the link-up would no longer take place.

Mrs Kerswell added: 'Our staff have worked very hard on the plans for a joint venture company and I commend them for that. However, despite working very hard to reach contractual agreements, we face real difficulties in coming to an agreement on the financial aspects of the venture.

'I am therefore going to be recommending to the council that we draw a close to the negotiations.'

Mrs Kerswell said the council would look for alternative ways to boost its services.

Involvement in a joint venture company would have given Solihull an opportunity to take advantage of recent legislation permitting public authorities to sell their services.

After winning the right to hold talks on the issue, Severn Trent identified the Government's eagenda, which promotes online and 24-hour telephone access to local authority services, as a business opportunity.

The two sides agreed in principle that once the necessary IT investment had been made the joint venture company would look to market its services beyond Solihull.

CAPTION(S):

Katherine Kerswell