BT Cornwall is not working for Cornwall Council as it should

Today, at Cornwall Council ‘s full member meeting, a question was asked of the Portfolio Holder Adam Paynter, whose responsibilities includes the BT Cornwall (BTC) deal on how well the deal was going. As many readers will know, I led the charge against the wholesale privatisation of many Cornwall Council services.

The answer to the question was damning. In fact it gives real credibility to those who fought against the privatisation of so many Council services, as even the watered down version of the deal is not working for Cornwall Council.

To refresh readers minds, my notes from way back on the deal, say the BT deal will:

  • Savings of 20% by end of year two. This is further broken-down by 10% in year one; 11% in year two, and 18% from months 24 to the end of year 10.
  • 197 new guaranteed FTE jobs by end of year four with 111 coming in the first two years
  • 313 new jobs through ‘reasonable endeavours by the end of year 5 – 240 in the first two years.
  • Gain-share of 30% profit from trading telehealth/telecare
  • 10% min of profit of guaranteed for any other business trading from Cornwall BT.
  • Trading investment in bidding for new work £1.9m

In Adam’s answer he listed the areas that were not working or have failed to meet the promises as his reply points out:

“In respect of operational delivery, Key Performance Indicators have not been met on a consistent basis and there is little evidence of service transformation.

Specifically, on the Windows 7 upgrade, this has been substantially delayed and there have been problems with implementation. The process has now largely been completed but the failure to upgrade the network is leading to capacity and performance issues.

On the financial side, BT Cornwall have met their contractual baseline savings in their entirety because those are deducted at source. However, there has been no gain share for the Council as BT Cornwall have failed to generate any trading opportunities .

In respect of guaranteed new jobs in Cornwall, BTC has only created 35, less than a third of its target for the first 2 years.

In summary, the contract has been far less successful than was anticipated when it was signed 2 years ago.

Officers are satisfied that the senior management of BT Global fully appreciate the serious concerns I and many Members have about the current situation and are putting significant effort into turning things round. However, there is a great deal to do to bring about the required improvement and to restore confidence. Progress will be robustly monitored and managed and a further report will be considered by the Resources PAC on 19 June. Last Friday, the Audit Committee also requested a report on the effectiveness of the BT contract delivery.”

This answer comes after a recent meeting of the Resources PAC and its damning report on the deal so far.  In the report the only positive is the savings in year one and two. These – thankfully – have been 100% achieved. However, many other areas have not.

BT Cornwall (BTC) made a contractual commitment to deliver a minimum of 197 additional jobs to Cornwall over the life of the contract with 111 of these being delivered in the first two years. Of these, only 35 have been delivered so far. There was also a commitment to try to deliver a further 240 jobs in the first two years and NONE of these have been delivered. In fact at the February meeting, there was little evidence of remediation plans or investment required to deliver on the jobs guarantee and commitment.

As part of the overview of performance against commitments and guarantees this comes out as 32% and 0% against the 100% target. This is just not good enough.

Taken from the recent PAC report, BTC have received nearly £25m in respect of services provided over the first two years of the contract, of which nearly £17m is the unitary charge.

Furthermore, there had been a delay in securing contract notations with suppliers which meant, as an interim measure, the Council had to pay suppliers and reclaim the monies from BTC!!

As part of their bid submission, BT estimated trading gain share to the Public Sector Partners of £17m over the 10 years of the Contract. To date, no gain share has been received from trading. It is recognised, however, that this is not a contractual commitment.

The full report can be found HERE and includes the Windows 7 upgrade who has been hugely frustrating for people. In fact Councillors have been so concerned with the implementation of this upgrade they have asked for an estimate of the time lost and financial cost to the Council caused by the overall delay and the operational downtime as a result of issues with upgrades.

From this, BTC have promised to sort all the issue and have changed their management structure to make sure this happens. However, my concerns are BTC have had two years to deliver this contract and have failed. There is only so many second-chances you can give. For me, if by summer BTC do not deliver their commitments, than I am afraid we must be in the area of looking to terminate the contract. I feel if this was a full private sector deal, the contract most likely have already been torn-up.

In fact, I am glad despite many call from other Councillors to actually increase the BTC deal, we did not. As if we did, then we could have been in a more perilous position than we currently are.

Let’s see if BTC can pull that rabbit out of the hat…..





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