Two English councils sign up to Azure for six years in £35m reseller deal as ERP project faces delays, ballooning costs

Local authorities' shared Unit4 system is late, overbudget, and only works on Microsoft's cloud


Two local authorities in northwest England have awarded reseller Insight Direct a six-year £35m contract for Microsoft licences and cloud services.

Cheshire East and Cheshire West and Chester Councils have teamed up to "adopt and consume Microsoft Azure SaaS/PaaS and other cloud-hosted services and products" under the deal.

The councils said they would "continue to migrate core applications into an Azure cloud environment through engagement with our strategic cloud enablement partner."

In September 2020, the cabinet of Cheshire East Council authorised the spending, saying the decision was made "to avoid the costs of change as a result of a change in technology."

It said the approach was supported by a Memorandum of Understanding between Microsoft and the UK government called The Digital Transformation Arrangement, which dates from May 2018, and the Azure Pricing Agreement amendment from 30 April 2020 to 30 April 2021. "These agreements enable UK public sector customers to receive greater discounts for our Cloud hosted solutions," the cabinet document [PDF], signed off by Gareth Pawlett, CIO and head of ICT services, said.

The deal follows a shorter arrangement to secure a Microsoft cloud migration partner for £5.31m over a two-year contract period, funded jointly by Cheshire East Council and Cheshire West and Chester as part of a five-year IT investment programme [PDF].

According to the Shared Services Joint Committee [PDF], it had inherited a funding gap of £4.275m which was "robustly managed" during financial year 2016/17. The cloud migration would offer "significant financial benefits for both Councils service areas and ICT and is future proofed to meet the needs of both Councils."

The councils' dependency on Azure, and their joint IT strategy, is cemented by their decision to share an ERP system, based on Unit4, which is more than two years late and set to cost £10m more than first planned, according to local news reports. The authorities signed an agreement with technology firm Agilisys in 2017 to build the new HR and finance system, which is set to replace an Oracle system.

The expected costs have climbed from £11.5m to £22.3m. The system is now set to go live in February. Unit4's cloud software only works with Azure.

The councils have yet to respond to The Register's request for comment. ®


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