Local independent councillor in Cornwall Andrew Wallis reports that the High Court delivered a judgement today in favour of the council’s action to end its outsourcing relationship with BT early.
The BBC reports part of the judgement. It says that Mr Justice Knowles ruled BT “faced problems of its own making” and did not provide “the service it had promised to the standard it had promised”.
The judge ruled BT Cornwall Ltd was in breach of the 10-year arrangement and the council “entitled in all the circumstances to terminate the agreement forthwith”.
He said: “It is very much to be hoped that all parties to the dispute will consider the position carefully, in the interests of the public, and take steps now to avoid a similar situation in the future, in Cornwall or elsewhere.”
The 10-year deal was signed in March 2013 for BT to run IT, human resources and other services for the council.
Councillor Wallis says that since 1 December BT Cornwall and Cornwall Council have been in a legal battle in the High Court over the BT contract. Councillors and officers believed they had a right to terminate the agreement for breaches in the contract.
BT Cornwall disagreed and sought an injunction on 12 August 2015 to stop the agreement being terminated without good reason. This led to a hearing in August 2015 in which the judge agreed to an expedited trial this month.
This morning Judge Knowles gave his judgement. Wallis, who has always been sceptical that any outsourcing deal with BT would bring the claimed benefits, says on his blog,
“I am very pleased the judgement was in favour of the Council. This judgment 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 that, therefore, we were justified in reaching the decision that we were entitled 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. We also intend to hold discussions with BT Cornwall to agree the level of damages the Council will receive.
“I would also like to say well done to the Council’s legal team who took on the might of a mighty corporation.”
Wallis added that 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.”
Cornwall council now intends to provide notice of termination of the contract before Christmas, says Wallis.
Transferring about 250 staff and services from BT Cornwall to the council and its NHS partners will begin in January and will be “completed as quickly and smoothly as possible”, says Wallis.
Services going back to the council are:
- HR Transactional Services including Payroll and HR Employment Support
- First Point Helpdesk
- Financial Processing
A report to the council in April this year said that “Service Transformation anticipated at the time of contract commencement has not reached anything like the intended levels”.
A spokesman for BT said it was “disappointed” with the result and would be “reviewing the judgement carefully and considering its implications”.
Update (thank you to campaigner Dave Orr who has maintained close contact with Cornwall’s councillors):
The judge has awarded costs to Cornwall and the right to pursue damages. He did not grant leave to appeal.