Cornwall Council opts for IT outsourcing after rejecting BT privatisation

Cornwall County Council has voted for an IT outsourcing and telehealth partnership with BT after rejecting a comprehensive privatisation plan

Cornwall County Council has voted in support of an IT outsourcing and telehealth partnership with BT after rejecting a controversial plan to privatise a much broader range of council services.

After councillors threw out their executive's privatisation plan in October – following a dramatic revolt in which councillors axed leader Alec Robertson – they had to decide between 13 possible alternative outsourcing scenarios produced by the council executive, with another option of keeping everything in-house.

Councillors voted for a much-reduced privatisation option covering Cornwall's IT department and a joint venture with BT and regional health bodies to develop a telehealth hub. Cornwall Council hopes the privatised telehealth hub programme will prove the start of a thriving industry and bring jobs to the region.

But the reduced privatisation option was so undeveloped it was given to the Council Cabinet for scrutiny before Cornwall concludes its decision-making and signs a contract with BT.

Councillor Steve Double, who was Cabinet lead on the now-rejected full outsourcing proposal, summed up the fear that finally swung Cornwall in BT's direction.

Health job creation scheme

"It comes down to a choice between managing decline and an opportunity for growth," Double said.

BT said the proposal would bring jobs to Cornwall by setting up a telehealth centre to compete for health business with other authorities around the country. Councillors who backed its bid said they were doing so because they wanted to bring jobs to Cornwall.

"It's not about privatisation. It's about opting in, building Cornwall up, investing in people and holding jobs in Cornwall," Neil Burden, independent cabinet member, told the chamber yesterday.

"This is a joint venture. It's not a takeover bid. And it's a means of saving jobs and the potential to create new jobs for the working population in Cornwall," Burden said.

Sue Nicholas, Conservative Councillor for Marazion, said Cornwall needed to modernise its health system and the BT deal would do it.

"What's important with an aging population and the rural community we have is telehealth and telecare systems everyone can link into," Nicholas said.

Benefit mirages and aspirational job ambitions

But BT was nearly thrown out entirely. The council had been swayed by persuasive arguments against outsourcing. Councillors voted overwhelmingly to oppose the original £800m deal that its chief executive had been working on for the past two and a half years.

Councillor Jude Robinson, leader of Cornwall's Labour Party, said she became sceptical of BT's commercial promises after a year on the council panel scrutinising the proposal.

"I felt that every single benefit we were being sold on this joint venture has turned out to be a mirage," she said. "The closer you get to it, the more vaporous it becomes. The 5% year-on-year savings has become 2.5%. The jobs created, aspirational."

Other councillors said the council should fight to keep close democratic control over its services. They said Cornwall Council should distribute ownership of its services to towns and parishes and not to external companies that might expatriate public funds as profits for foreign shareholders. Once Cornwall sold its public services it would never be able to get them back, they said.

Councillor Loveday Jenkin, an environmental scientist representing Cornish devolution party Mebyon Kernow, said: "I can tell you a lot about how environments work. And I can tell you that in Cornwall in the future there will be challenging conditions. We are going to need to have the resilience to be adaptable.

"We need to be working with our environment - our staff, our geography, our people and services. We need to look at how money actually recycles in our local economy. We can create a much more resilient organisation, or organism, by working with our staff and not selling off to the highest bidder."

Councillors ultimately backed the promise that BT's telehealth business would bring jobs to the unemployed in towns such as Bodmin. And BT's telehealth proposal, as relayed to councillors by Kevin Lavery, the county chief executive, had been made on the condition that Cornwall threw its IT department in too.

Read more on IT outsourcing