Cornwall

Cornwall Council's High Court victory over £160m BT contract

Cornwall Council chamber
Image caption Attempts to reach an amicable end to the deal between the council and BT failed

A £160m contract between a council and corporate giant BT will be scrapped following a High Court ruling.

BT tried to fight a Cornwall Council decision to end the 10-year contract after only two years.

But 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 10-year deal was signed in March 2013 for BT to run IT, human resources and other services for the council.

The judge said all parties involved should "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 council, along with Cornwall Partnership NHS Foundation Trust and Peninsula Community Health CIC, entered into the agreement with BT Cornwall (BTC) in March 2013.


TIMELINE

  • March 2013: Deal signed with BT Cornwall
  • April 2015: Strategic Partnership Review criticises failure of BT to meet the guarantees it provided when the deal was signed
  • May 2015: BT is fined more than £100,000 for contract failures
  • June 2015: Council tells BT it wants to end contract
  • July 2015: Council enters "standstill agreement" in order to "facilitate negotiations for an amicable termination". However an amicable termination could not be negotiated
  • August 2015: BT Cornwall files an application with the High Court to seek an injunction preventing the council from terminating the agreement
  • 1 December 2015: High Court trial listed to determine if the council has the right to terminate the agreement or not
  • 21 December 2015: Mr Justice Knowles rejects the claim by BT Cornwall that the authority was not able to terminate the contract.

A Strategic Partnership Review by the council in April 2015 said BT had created only 35 jobs out of 111 promised in the first two years.

The council wrote to BTC in June 2015 asserting it had the right to end the agreement because of the alleged failures to fulfil promises set out in the contract.

'Sweet nothings'

The judge said the agreement document was "very hard to work with because of its impractical length and the imprecision in some of its drafting".

Around 250 staff are now expected to be transferred back to Cornwall Council from BTC from January 2016.

Cornwall Council cabinet member Andrew Wallis said big corporations "were quick to whisper sweet nothings into any local government ear promising to solve their funding problems".

He said: "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."

A spokesman for BT said it was "disappointed" with the result and would be "reviewing the judgement carefully and considering its implications".

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