COUNCIL officers in Redditch and Bromsgrove underestimated the cost of a new joint computer system by an eye watering £342,000 – almost twice what they’d expected to pay.
The ‘Enterprise Resource Planning System’ is billed as being able to give the two authorities ‘a more strategic, long term approach to financial management’.
However when it came to managing the finances for the new system, Redditch and Bromsgrove councils found themselves both £171,000 short of what they estimated it would cost.
In a document council officers described the gaffe like this: “The tendering exercise has demonstrated that initial cost estimates of the system were lower than the final preferred bidder’s price.”
In fact the true price tag on the system was £735,700, not the £395,000 they’d expected, and budgeted, to pay.
The new price works out at £367,900 per council, almost double the anticipated cost.
Not only that but both councils have had to put aside a contingency sum to cover any unknown costs they might encounter.
Coming in at 10 per cent of the total cost, this adds an extra £74,000 to the bill, or £37,000 per council.
Last Tuesday, March 26, members of the executive committee at Redditch Borough Council were asked to recommend to full council that the authority stump up an extra £208,000 to cover their share of the shortfall.
Executive finance director for the two authorities, Jayne Pickering, told the meeting there had been no upgrade of the finance computer system since 2007 with only a slight update being introduced in 2014.
Members duly agreed to recommend the extra cash to full council which next meets on Monday, April 15.
The extra money has already been approved by Bromsgrove full council which met on Wednesday, March 28.
