Slough Borough Council was ‘held over a barrel’ by a software firm forcing the hard-up local authority to spend tens of thousands of pounds extra, a leading councillor has said.

Software company Unit4 wanted the council agree to keep using its Agresso programme – used for processing payments – for another five years after changes to its contract.

Council staff said the move will cost the council £75,000 more than budgeted for this year – but that the council was left with no time to find an alternative.

Councillor Wal Chahal – in charge of finance – said he was ‘quite annoyed’ at what happened. He said: “I see this sort of stuff quite a lot in business, where the model changes. It’s like being held over a barrel – I don’t like it.”

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Slough Borough Council says Agresso is ‘critical’ to how it runs. It says without the programme, ‘suppliers and staff would not be paid, and the council would be unable to receive income’.

But software company Unit4 made changes to how it provides the programme. It told the council last November that it had until December to move to a new platform and contract.

The changes will cost the council £75,000 more than planned this year. Yet if the council doesn’t move, it will lose access to new software and security updates – leaving it at risk of data breaches and being unable to carry out ‘essential financial activities’.

Councillor Gurcharan Manku said the council could have acted faster to find an alternative. He said: “There should be prompt action when we know there is not much time. That’s where we are failing.”

But councillor Chahal said the council would have needed two years’ notice to find and move to an entirely new programme. He said: “It will take literally a year to 18 months to go out and find who else is out there, to trial programmes, to then make a decision. It’s not like going to Tesco and saying ‘I’ll have two of those and three of these’. It doesn’t work that way.”

He added: “They only gave us one year’s notice – we needed two years’ notice. They were forcing our hands.”

Council officers said they had tried to negotiate a longer notice period with Unit4, and a lower price, ‘but they would do neither’. They said other councils in Berkshire had also been caught out, and that Unit4 was trying to become ‘a nationwide player for local government’.

Unit4 such changes in software were ‘very standard in the technology industry’. It said if customers agreed to the transition by December, they would be ‘additional time’ to transition to the new software.

The company also said it ‘works with its customers to carefully plan their migration paths to manage expenditure and resources’.

Slough Borough Council says some of the £75,000 would go towards on customising the software and training staff, who had found it difficult to use.

Council leaders voted to approve the new contract at a cabinet meeting on Monday, September 16.