I totally agree, but the problem is, how can you in-source it. It will cost an absolute fortune to re-build the infrastructure that was sacrificed when Southwest One took over. Virtually none of the server side systems are even in Somerset, so they cannot just take control, and there are probably none of the original staff that ran the previous systems around, and the data-centres probably re-used for other purposes or sold off.
Even if you distribute the existing staff back to the members, you will probably not get enough people in each to achieve working IT departments, and many of the people you would get would be the ones that were not able to prevent this situation from happening in the first place (and that is putting it kindly!)
I cannot but think that the original agreements should have contained dissolution points and clauses that would have allowed the Southwest One to be dismantled in an orderly fashion if it was found to not work. I think I agree with ILG about the original project, in that there appeared to be murky things happening under the covers and out-of-sight when the whole project was being planned and the contracts drawn up.
I think that the whole thing should be referred to the NAO, who should look at it with a critical eye and a fine toothed comb.