The new contractor which introduced a new finance and payments computer system for Lincolnshire County Council has apologised for the major problems that have arisen ever since.
Serco introduced the Agresso payments system in April but since then has struggled to get to grips with issues that have meant council, schools and fire service staff have been receiving incorrect wage and pensions payments.
Suppliers have been going unpaid, staff have struggled with mortgage payments or been affected by incorrect tax, pension and National Insurance contriubtions and schools have been unable to budget properly for the year ahead, according to one governor. This has led to threats of bailiffs and services being cut off. Suppliers have been overpaid and some former school staff have even received payments after they left, it has been claimed by those affected.
Serco says the payment system is getting back on track now after the backlog of invoices peaked at 14,000.
Leader of the Labour opposition group Coun John Hough led a motion calling for a full investigation and an apology by the council at its meeting on Friday but this was amended by Leader of the Council Martin Hill.
Coun Hill said: “This council is seriously concerned about problems which have occurred and continue to happen with the new back office outsourcing being delivered by Serco.
“The council notes that a great deal of work has been done both by the council and by the supplier to rectify the situation and Serco has made a commitment that the problems will be sorted out in the next few months.
“We also note the progress made and the fact that Serco have invested considerably to resolve the issue and the progress made so far. The council does expect costs to be recovered from Serco which has received a positive response.”
He said it is the intention of the executive to undertake a review once Serco have ensured the new systems are working correctly which will review lessons learnt from the award of the contract and its commencement.
In the interim a cross party Recovery board has already been set up which will monitor progress and advise the executive and management.
Coun Hill went on: “There is now considerable support and communications to schools to help them deal with local issues and an enhanced help desk arrangement for them and suppliers with particular problems.”
He insisted: “The contract was awarded following a rigorous tendering process which was fully compliant with EU legislation and will engender around £14 million of savings for the council for its duration. This will be in addition to the 20 per cent savings achieved when back office services were first outsourced in 2000.”
The Council noted that Serco have issued an apology relating to the performance of the new systems and that the Executive investigation would also ask why eight and a half months after Serco was supposed to take over various functions, the contract as agreed is still not being properly implemented.
The council also noted that schools and staff have had additional work and pressures as a result of system problems, requesting the Executive seek recovery of additional costs from Serco.
Sean Hanson, Managing Director of Serco’s Local Government business said: “We apologise to all those affected by problems resulting from the introduction of the new IT service in Lincolnshire. We know how frustrating this has been and the real impact this has had on some people’s lives. We are fully committed to putting things right.
“We continue to work tirelessly, alongside the County Council, to rectify the remaining issues, limit any further disruption and improve our performance. We have boosted our senior management team in Lincoln; recruited additional staff to deal with enquiries; and visited over 100 schools to listen to their concerns and make the changes needed.
“We are making progress and there is a clear plan of action in place. Our stabilisation programme is on track and almost three quarters of the actions completed; the backlog of queries from schools and corporate payroll (up to September 30) has been completed; the number of monthly payroll enquiries has halved; and the backlog of invoices has reduced from over 14,000 to 500.
“We know there is more work to do and we are committed to resolving the outstanding issues and achieving the savings and improvements promised when we signed this contract.”
Denzil Shepheard, chairman of Governors at St Botolph’s Primary School at Quarrington said fewer staff are now being paid incorrectly, but huge concerns remained as schools are still unable to produce any proper budgeting records to assess and review their spending.
Mr Shepheard said: “Governors have been told to ensure that they don’t overspend, but it is not really possible to be certain of that in any meaningful way. There has been such chaos, not only with salaries, but all payment in and out that there are real concerns that an overspend could occur just because of inaccuracies.
He said staff had been made ill with the stress of the situation.
He said: “There is still no end date available as to when everything will be back to normal, although Lincolnshire County Council has now started contacting any staff who were overpaid to arrange repayments – the letters are very formal and don’t sound sympathetic and make it clear that the expectation is that most people will be expected to pay back overpayments as quickly as possible, preferably in one transaction. Alternatives “are negotiable”.
“Some staff who have been incorrectly paid (especially true of people who did not get paid and had emergency payments) are concerned that they may suddenly and unexpectedly be billed for unpaid tax or National Insurance contributions or that their pension contributions may not have been paid accurately. One colleague asked if the council or Serco would pay for her finances to be professionally reviewed and was told this was not possible, but she could make her own arrangements (at her own expense).”