Calderdale Council facing £4.9m bill to upgrade its IT systems

Calderdale Council will need to pay out around £4.9 million over a two year period to replace a number of Information Technology systems.

Officers are recommending the council uses capital investment to upgrade the business critical systems and that the cost of prudential borrowing – which must be affordable and prudent under local authority rules – to do so be built into Calderdale’s Medium Term Financial Strategy, which sets out a framework for spending over a three-year period.

But councillors warned the council it could overstretch itself if it continues to fund capital programmes by prudential borrowing, when members of the council’s Strategy and Performance Scrutiny Board discussed the report.

Interim Corporate Lead for Digital and ICT, Jonathan Smith, outlined in his report the need for the council to renew or replace several key systems between now and May 2021.

These include the council’s Cisco Phone system now at a cost of around £350,000, its Windows 7 system by January 2020 at a cost of more than £1.5 million, its MS Office 2010 system by October 2020 at a cost of almost £2 million and its Oracle and IT Core network by May 2021 at a cost of £1 million.

The report says that spending on IT contracts will vary from year to year depending on what contracts are up for renewal and are not normally supported from the council’s revenue budget, its IT reserve or, where appropriate, service departments.

It points out that the service has delivered significant savings for the council over the last three years buy not investing in new systems.

But all service areas are becoming increasingly reliant on IT support and the use of technology to deliver both essential services and savings.

The council’s IT service operates with a budget of £3.6 million net – about two per cent of the council’s budget – and 80 staff, supporting core infrastructure systems, in-house systems staff continue to develop, increasing resilience and producing around £5 million of savings over the last three years, third party systems and special projects and development work.

Their importance is such that they must be fit for purpose and with significant threat of cyber crime need to be kept up to date and the core systems in question replaced before their support expires, said Mr Smith in his report.

“Put simply, not upgrading means no support. No support means no protection,” he said.

Coun Jane Scullion (Lab, Luddenden Foot), council Cabinet member for Resources, Performance and Business Change, said the replacement costs for the important systems were a very modest amount and carefully looked into.

“I think we have been through every single contract working out where we can save money,” she said.

Board chair Coun Paul Bellenger (Lib Dem, Greetland and Stainland) said he would like more details so the board could start examining some figures looking ahead, although this money would have to be spent.

“At the end of the day, we know these services are needed but we also, as a scrutiny board, have to keep an eye on the finances,” he said.

Coun Scott Benton (Con, Brighouse) said he understood the importance of ensuring the council’s systems were up to date as it could not do anything as an operation without IT.

But he was concerned about the council continuing to fund projects using prudential borrowing, adding up costs which would mean less money to spend on some front line services later.

“For the last few years, time and time again we have continually been adding to borrowing. Every time we have to prudentially borrow it is less money to spend on local services,” he said.

Major projects like the Salt Barn were being funded this way, said Coun Benton.

“If we’re not careful we are taking the easy option out time and time again. We are far to happy to add expenditure with prudential borrowing. I find that unacceptable, personally,” he said.

Coun Jenny Lynn (Lab, Park) said Cabinet, when it considered the issue, expected to be at its February meeting, should take note of councillors’ comments although at the end of the day these upgrades were needed.

The board agreed to note the report and requested Cabinet members take note of their comments and concerns.