BT Cornwall contract is today, officially no more.

Today marks the official end of the deal between BT Cornwall and Cornwall Council after the High Court granted judgement in favour of Cornwall Council and BT Cornwall did not appeal against that decision.

The contract has been terminated and services will  as of today – 18th January 2016 -transfer back to the Council. This will involve approximately 270 employees in HR Transactional Services – including Payroll, HR Employment Support, First Point Helpdesk and Financial Processing, ICT, Despatch, Printing and Telecare.

Both Cornwall Council and BT Cornwall have been working together to ensure that this process takes place as smoothly as possible and all services will be maintained.

The Council is continuing to hold discussions with BT Cornwall over the payment of costs and the level of damages we will receive, which as I said before, could run into many millions.

With this outsourcing journey now finally at an end, it is time to move on, learn lessons, and do not repeat such a project again.

BT Cornwall verses Cornwall Council Judgement goes in favour of the Council

Since the 1st December, BT Cornwall (BTC) and Cornwall Council have been locked in a legal battle in the High Court over the BT contract. The reason is because the Council believes it has the right to terminate the agreement for breaches in that contract by BTC. Of course, BTC disagrees with this.

To recap, BTC filed an application with the High Court in order to seek an injunction on 12 August 2015, preventing the Council from terminating the agreement. This resulted in a hearing which took place on 12 August 2015 in the High Court (Commercial Courts). The outcome was that the Court agreed to the request to have an expedited trial set for December.

As for the reasons why, please read the previous blog post HERE.

Anyone who has been reading this blog, will know I have written a lot (all blog posts HERE) about this subject. Reading back through them reminds me how the Council was in open warfare against the Cabinet. There were petitions;  the Portfolio Holder for Finance, Jim Currie resigning and the no-confidence motion which saw the disposing of the Leader of Cornwall Council. It was a bloody and costly war that saw the BT-light deal being signed on the 27th March 2012. I finished off that post with the line of: ‘Lets hope the Council does not regret this day’.

Today, the Judge gave his judgement after hearing the evidence from both sides. I am very pleased the judgement was in favour of the Council. This judgment which confirms our argument that BT Cornwall had been in material breach of the contract due to their failure to carry out services to the required contractual standards and, therefore, that the Council was justified in reaching the decision to terminate the contract.

The ruling also means that the Council will be seeking payment of its costs from BT Cornwall in connection with this legal action.  From this, the Council intends to hold discussions with BT Cornwall to agree the level of damages the Council will receive. This could run into the millions.

I would also like to say well done to the Council’s legal team who took on the might of an international corporation – and won.

Has the Council regretted that day? I have thought about this and it would be easy to say ‘I told you so’ but that would serve no purpose. However, it is clear the principle of outsourcing great swathes of public sector to commercial companies who have little, if any, understanding of the public sector is flawed.

I feel the reason why so many council’s took the outsourcing route is because they thought it was an easy way of saving money. The commercial companies were quick to whisper sweet nothings into any local government ear promising to solve their funding problems. The truth be told, local governments, are better at knowing how to save money. They do this without thinking of how it will affect the profit margin. Local government do not think about profit margins, but how changes will affect the service user.

Following this legal ruling the Council intends to provide notice of termination of the contract before Christmas, but there will be no immediate change in the arrangements as termination will not take effect until January. The process of transferring staff and services from BT Cornwall to the Council and our Public Sector Partners will begin in January and will be completed as quickly and smoothly as possible. This will involve approximately 250 members of staff.

The following services will transfer back to the authority: HR Transactional Services including Payroll, HR Employment Support, First Point Helpdesk, Financial Processing, ICT, Despatch, Printing and Telecare. My thoughts are with the staff who will yet again be affected with this judgement.

I will now wait till the judgement is released to give a further viewpoint……

 

Cornwall Council tries to pull the plug on BT Cornwall

The saga that is BT Cornwall has taken a new twist with Cornwall Council and BT heading to the High Court to settle a dispute on the termination of the BT Cornwall contract. The reason for this is because BT disagree with Cornwall Council reasons for termination.

On this blog I have highlighted how the BT Cornwall contract has failed to deliver in just about every area. These failing have also been discussed at various committees with damning reports being presented. After over two years, the contract was simply not working; and therefore, Cornwall Council has decided to exit the contract.

My views on the joint venture are well-known, and there is no reason to repeat them, or say ‘told you so’.  My concern and anger is on the stance BT Cornwall is taking by dragging Cornwall Council to court because of their failings.

The reports that led to Cornwall Council exiting this contract are clear. BT Cornwall have failed to deliver. Yet, BT Cornwall dispute the reasons for termination. I really cannot understand BT Cornwall’s stance on this, as after two-years, they cannot deliver the contract.

We have got to this position when on July 8th the Cabinet approved the process of exiting the contract and the wheels were put in motion to start the process. The decision was kept low-key to allow discussion to take place to find a pain-free way of exiting. I believe this ‘divorce’ could have been amicable, and not cost the tax payer huge amounts in legal fees.

Sadly, this has not happened, and BT Cornwall has decided to fight this through the courts using all the financial might it can muster. I do not know on what grounds, as the evidence is clear on the failings.

BT Cornwall filed an application with the High Court in order to seek an injunction on 12 August 2015, preventing the Council from terminating the agreement. This resulted in a hearing which took place on 12 August 2015 in the High Court (Commercial Courts). The outcome was that the Court agreed to the request to have an expedited trial, which is now listed to take place on 1 December 2015, to determine if the Council has the right to terminate the agreement or not. The Council will fight this, and I believe it has a strong case to win.

I guess we will find out in December.

 

 

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…..