BT Invited to Tender for the JV

Yesterday, Cornwall Council’s Cabinet approved the process to send out the Invite to Tender for the Joint Venture. It did surprised me that after the Budget vote and the loss of a large chunk of staffing costs, the JV was finished. However, it turns out it is not, as suddenly BT have offered a better deal to mitigate against this lost of finance.

I cannot say too much on what happened at the meeting because most of the debate was in closed session (no public allowed to be present). I will say there are savings. But no way near what was hoped. Though it will be interesting to see the final costs the council incurred against the actual savings this contract will bring over the 10 year period of the contract. It would not shock me if the difference between the two was not that much.

As for jobs, there is a number of guaranteed jobs during the life of the contract. It is not anywhere near the original 500. But to be fair, the contract is a lot smaller. There is also an ‘aspiration’ for more jobs, but that is not guaranteed.

It frustrates me that I cannot actually say what has been agreed. After all it is in the public interest, it is using tax payers money and there is only one bidder left in the mix. So it is hardly going to make a difference. By keeping it so secret it just portrays the culture of secrecy, mistrust and misunderstanding of council business.

18 comments

  • worried worker

    A slap in the face. As if the council tax vote wasn’t enough, now this! Given all that’s changed with the bid, how on earth can it still be legal to just have one bidder? The whole thing looks like an utter farce.

  • Andrew Wallis

    You should have been at the meeting…..

  • Despondent Worker

    Now there’s a shock. Who saw that one coming? What a complete travesty of democratic process.

    As for costs vs savings, as far as I’m concerned, this is not pragmatic and nor will there be any real practical financial or operational gains from the JV. This is effluent raw Conservative ideological sewage – nothing more.

    I suspect history will judge this; a bad day for Cornwall.

  • A benefits assessor

    I would be surprised if an ITT to one vendor would stand up against a procurement process challenge. But if there are no other interested parties, who would mount such a challenge? Andrew ? How a out it ?

  • Andrew Wallis

    You’re right. The risk is low on the legal challenge because someone has to challenge. As BT are the only ones left in, they are not going to challenge it!

  • mick martyn

    A strange observation Andrew, i know you have been against this from the start so wont say otherwise but on the back of last weeks crazy decision i would have thought this deal becomes even more important as without it the Council will have to deliver even more cuts to services on top of those that will be coming out soon (although of course these cuts would not be necessary if the lib dems were in charge as they would implement their budget properly).

    Re the cost of the council doing this, surely if you hadnt led the campaign last year which ended up delaying and reducing it the councils cost would have been much less and savings/jobs much more?!?!?

    Guranteed savings, guaranteed jobs and guaranteed service standards (or if not financial penalties) + guaranteed to all be run/grown in Cornwall, against a backdrop of councils declining this must be seen as a good deal.

    I’m refreshed, there are some members left in the council with some common sense/

  • Despondent Worker

    Mick, respectfully,

    Common sense dictates that a private, profit making company are only going to be keen on this deal because it will prove profitable for them. They are not going to be interested in running anything at a loss or for the good of the residents of Cornwall.

    Profit is the net difference between the cost of delivering the service and the charge for the service. Realistically, there are only two ways to accomplish this; by charging more than the service costs or by charging the same amount but reducing the level of service.

    The traditional argument here is that private companies are inherently more efficient than government organisations and are therefore able to deliver the magic free lunch. Meanwhile, back in the real world… this is rarely (if ever) the case and anyone who has bought a rail ticket or paid their water bill lately should be able to testify to this.

    Of course the latest spin on privatisation is the ‘Strategic partnership’ or ‘Shared services’ idea which will deliver efficiency and savings by sharing resources between organisations as we all hold hands and wear our little JV hats. Again, back on Earth… I suspect we’ll actually see a disjointed mashing together of several disparate departments, systems and processes complete with flying shrapnel and an endless precession over-paid project managers attempting to hold the whole ungodly mess together.

    I, for one, salute Andrew and anyone else who has had both the foresight to see where this will end and the courage to speak their minds about it. My guess is that the cost incurred due to any delay while some tried to get the proposal subjected to proper scrutiny and democratic debate, will pale into insignificance next to what it will cost when the whole thing unravells
    spectacularly in a few years time.

  • Another Despondent Worker

    Well said Despondent Worker.

    My section is in scope for the JV so my opinion can not be described as unbiased but for what its worth, here it is.

    I’ve worked for the council for a number of years providing a service to the people of Cornwall and my colleagues within the Council. I’ve taken pride in my work, in particular the knowledge that by doing a good job I’m doing something that helps my community.

    The JV fundamentally changes my approach and attitude to my job. Once the JV has been approved, my role will no longer be one of providing a service to the people of Cornwall, it will be one of making as much money as i can out of Cornwall Council whilst servicing any performance indicators required of me to keep my job. I know I’m not alone in feeling this way.

    To be frank, it’ll be like shooting fish in a barrel. In a comment on one level of Cllr Wallis’ previous posts, the phrase ‘lions lead by donkeys’ was used in connection with the leadership of Cornwall Council., In the current case i think it would be apt to point out that the donkeys will be lead round by the nose by BT.

    It really doesn’t bode well for Cornwall and to be honest it disgusts me that this is being so badly handled. Its being rushed through before the elections and I fear that Cornwall will end up in the same boat as Sandwell Council and every other failed JV out there – stuck with an expensive JV that wont live up to the promises that naive councillors signed up to.

  • Johns

    This must be ripe for legal challenge. 3 other down-selected bidders dropped out of the running and this JV Scope has changed substantially since.

    I’d be surprised if CSC or Tata for example would not have liked the chance to bid for the business – if they had known how it now looks. A legal challenge from internal staff is not out of the question as there is no opportunity for in-house proposals to be tendered.

    I think regarding BT as some sort of fairy godmother here is misplaced. Any private organisation is driven by profit and shareholder returns, not altruism. A one bid tender doesn’t give huge comfort in the light of this philosophy.

    How much has this procurement cost to date – when I last looked it was around £2million. That’s a lot of jobs and services.

    Well done Andrew for opposing this nonsense.

  • worried worker

    “A legal challenge from internal staff is not out of the question” Maybe this is the way forward now?

  • Andrew Wallis

    Well, the ball is in your hands if enough agree. Maybe those nice Lawyers who are fighting the Barnet case would in interested. I am sure they are doing it on a no win, no fee arrangement.

  • Beware the Ides of Somerset

    If this is such a good deal and no-one else is bidding, then why is the dead hand of secrecy all over this deal as other suppliers cannot benefit?

    Is this more about protecting those who carry on regardless?

    Why not wait a few weeks more and put this deal to the people of Cornwall in the coming elections at the beginning of May as part of manifesto proposals – For & Against?

    ========================================================================

    http://www.thisiscornwall.co.uk/Cornwall-brings-plans-privatise-council-services/story-18341520-detail/story.html#axzz2MqvAbNzv

    “The authority has been criticised for treating councillors “like children” over the issue after deciding that documents with key details of the plans should be kept secret and handed back by councillors.

    Such is the sensitivity at senior level over leaks that cabinet papers are now printed individually with members’ names as a watermark on every page to guard against copying and to clearly identify whistleblowers.”
    ========================================================================

    Giving up IT to this deal will inevitably mean that Cornwall Council will lose the agility & flexibility that a good in-house IT can (and should) provide – ask Walmart/ASDA, Sainsbury’s and AXA – they all brought key IT back in-house again.

    I sincerely hope that BT honour the promised new jobs, but their joint venture deal in Suffolk fell far short of what was promised and ended in expensive disappointment. Mick Martyn please note.

    In Somerset, we were told almost 6 years ago that savings were “assured”. They weren’t and now an expensive High Court case beckons.

    It has badly affected the small District Council (Taunton Deane) involved who are servicing more debt as a result:

    ======================================================================

    http://www.computerweekly.com/blogs/public-sector/2012/02/downturn-undermines-flagship-g.html

    “Procurement savings have been delivered at a lower rate than originally anticipated in 2007,” said the report.

    “Back then it was estimated by IBM that £3.376m savings would have been generated by close of 2011/12,” wrote Paul Harding, performance & client manager for Taunton Deane.

    IBM had estimated its outsourcing deal would have paid back its costs within four years. Taunton Deane spent £3.65m on it in 2007. But it has been unable to repay £2.87m of loans it took out to finance the deal. The deal had delivered the council only £1.25m of its savings, forcing the council to reschedule its debt.

    Cllr John Williams, Conservative leader of Taunton Deane Borough Council told Computer Weekly it was “purely a coincidence” that a £2.1m shortfall in the council’s 2012-13 budget matched the £2.12m shortfall in savings IBM promised its outsourcing deal would deliver by 2012.

    “It is unlikely we will meet the original targets,” the majority of which were promised procurement savings, said Williams.
    ========================================================================

  • Despondent Worker

    “Why not wait a few weeks more and put this deal to the people of Cornwall in the coming elections at the beginning of May as part of manifesto proposals – For & Against?”

    For exactly the same reason didn’t they put the One Cornwall “Public consultation”, ahem, to a legally binding referendum vote or listen to everone that signed Andrew’s original e-petition on the JV – that is, they know they won’t get the answer that they want and continue to railroad it through obliviously.

  • Beware the Ides of Somerset

    Despondent worker: Your concise comments on where profit in public services comes from has made a Spend Matters comment on controversial NHS Commissioning (cuddly word to cloak privatisation – see “strategic partnership”):

    http://spendmatters.co.uk/controversy-over-uk-nhs-commissioning-procurement/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+SpendMattersUK%2FEurope+%28Spend+Matters+UK%2FEurope%29

    And Andrew’s Independence from party lines & whips is declared rarer than a Cornish Chough!

    PS Where is the representation on public service by Cornwall Trade Unions?

  • Beware the Ides of Somerset

    Cornwall no longer a model Council democracy?

    “Cornwall Council rushes to sign BT outsourcing deal before elections”

    http://ukcampaign4change.com/2013/03/08/cornwall-council-rushes-to-sign-bt-outsourcing-deal-before-elections/

  • Beware the Ides of Somerset

    Comment by veteran & well -respected IT Journalist Tony Collins (fomerly Computer Weekly Editor):

    “Cornwall Council, by the way, has one of the best local authority websites I have seen. If the website is a reflection of the imagination and efficiency of its IT department, Cornwall Council should be selling its IT skills to BT for a small fortune – not giving staff away.”

  • Beware the Ides of Somerset

    Former Cornwall Council CEO Lavery megotiates an “exit sweetener” in New Zealand!

    http://www.stuff.co.nz/dominion-post/news/8402587/New-city-council-bosss-exit-sweetener

    ——————————————————————————————————————————-
    Wellington City Council’s new boss is in line for a “golden parachute” payment of up to $200,000 if he ends up losing his job in a super-city reorganisation.

    If there is regional amalgamation before the end of Kevin Lavery’s five-year contract, and he doesn’t get another job within the new council, he will be entitled to half his $400,000 annual salary, or the remainder of his contract – whichever is less.

    The details of Dr Lavery’s contract as Wellington City Council chief executive can be revealed after an official information request by The Dominion Post.

    It also shows ratepayers spent more than $12,000 flying him to Wellington for an interview, and that he can claim up to $40,000 for the cost of shifting his family from Cornwall to New Zealand.”
    ——————————————————————————————————————————-

    A great shame that Mr Lavery doesn’t appear to negotiate Council contracts with the private sector as shrewdly he negotiates his own contracts! Why is that?

  • worried worker

    From our internal blog (not my writing), was wanting yours, no, the members thoughts on this:

    “Given the previous mention of BT having a no compulsory redundancy policy, I was surprised to read
    “…. less the 52 existing Council roles that BT estimate will not be needed by year 4”.
    The report talks about 282 FTE Council employees transferring (132 of which are from IS).
    By my calculations 52 out of 282 would be 18%. 18% of 132 IS staff would be about 24 people.
    The report then goes on to say “… contractural commitment for most impacted staff to be re-deployed”.
    I note that all the roles not needed will be from the Council side.
    I also note that most, and not all, staff would be re-deployed.
    I also wonder where they would be re-deployed to. Presumably not necessarily locally.
    What assurances can you give us about this please?”

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