Andy Dean - Fotolia

Court rules Cornwall Council can terminate BT outsourcing deal

Cornwall Council gets the green light from the High Court to end its £160m outsourcing deal with BT and plans to give termination notice before Christmas

The High Court has found in favour of Cornwall Council after BT tried to stop the authority ending its £160m outsourcing deal with the company.

Cornwall Council and BT met in the court earlier in December 2015 after the council announced it wanted to terminate its contract with BT. The company responded by filing for an injunction in an attempt to stop it.

The BT Cornwall deal – which was intended to last for 10 years when it was signed in 2013 – aimed to deliver IT services, document management, payroll, telehealth and telecare services. BT also promised to create jobs in the county.

The two parties have been in discussions over whether BT had been in material breach of the contract, as the council found it had not carried out services “to the required contractual standards”.

Mr Justice Knowles, giving the verdict, said BT “faced problems of its own making and did not provide to the defendants the service it had promised, to the standard it had promised”.

“The council worked with BT Cornwall to try to resolve things, but ultimately decided the position was not good enough.” 

A BT spokesperson said the company was disappointed with the ruling.

“We are reviewing the judgement carefully and considering its implications.We will be meeting with the council at the earliest opportunity to discuss the full impact of the court’s decision on BT Cornwall,” the spokesperson said.

However, the council told Computer Weekly in a statement that, as a result of the decision, “the council intends to give notice of the contract before Christmas” – but added that there will be “no immediate change in the arrangements, as notice 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,” the council said.

BT added it will continue to provide “high quality services” that are meeting “all key performance targets and bringing operational savings”.

When the deal was first signed in 2013, it had already caused friction. The original proposal for the deal included an £800m strategic partnership with BT, but that was put on hold in 2012 after councillors halted the process until the contract had been debated and approved by a meeting of the full council. 

In 2014 the council voted on several revised versions of the deal and ended up with a “smaller version”, which was still intended to deliver benefits such as cost savings of £17.6m over the 10 year period, and provide a minimum of 197 jobs.

In April 2015, the council published a Strategic Partnership Review, which found that BT had delivered less than a third of the jobs for which it was contracted.

BT was also committed to deliver a minimum of 197 jobs – 111 of them in the first two years – but the review found that only 35 jobs had been created.

According to the review, BT also committed to deliver a further 240 jobs, none of which had been delivered. 

In May 2015 the council fined BT more than £100,000 for contract failures and entered into a standstill agreement to try to facilitate negotiations to terminate the deal. In June, the council announced it wanted to terminate the deal.

The telecare and and telehealth services part of the contract is not affected by the decision and the council said these parts of the contract “will continue without interruption”.

Read more about Cornwall and BT’s outsourcing saga

Read more on IT for government and public sector