By Tony Collins
BT, with support from Cornwall Council’s Chief Executive Kevin Lavery, is working hard to persuade councillors of the benefits of a mega-outsourcing deal, ahead of a full council vote next week on whether to proceed.
On Tuesday the authority ousted its pro-outsourcing leader Alec Robertson and replaced him with Jim Currie who has opposed large-scale outsourcing.
“The financial risks involved with the rush into the new joint venture proposals are unacceptable. The JV [joint venture] is basically too large to control,” said Currie before the vote of no confidence in Robertson.
Now Currie hasn’t ruled out a deal. “Never say never,” he says. “It might be an option of last resort.”
Council CEO Lavery says in his latest letter to all staff that 46 councillors attended a confidential briefing with BT and the programme team on Wednesday. It lasted several hours.
More briefings were planned to enable councillors to “examine the proposals”. Lavery’s letter to employees (below) is published on the blog of independent Cornwall councillor Andrew Wallis. He says the letter indicates a “business as usual” approach.
Outsourcing plan a dead duck?
Now that CSC has withdrawn from the bidding leaving only BT some in Cornwall are saying that the outsourcing plans are a dead duck. But perhaps not.
An article on Thisiscornwall.co.uk suggested that councillors might not have ousted Robertson had they received a confidential briefing on the deal before the vote.
BT’s savings pledges
In its briefing BT offers “guaranteed” savings of £60.6m on the core contract in years one to ten, plus “£89m savings from procurement” - a total of £149.6m.
It is promising “additional forecast savings of £104.4m” plus £25m ”anticipated profit share from trading”, which BT describes on a slide as a “cautious” estimate.
BT is further promising “additional procurement savings” of £129.4m, bringing the grand total of promised savings to £279m.
When Andrew Wallis asked at the briefing how the figures stack up if one or more of the other partners such as the Royal Cornwall Hospitals Trust do not enter into the partnership (and it is far from assured that NHS trusts will join the partnership) he was told the figures would change. At that time BT could not give Wallis the revised figures but said it would send them to him.
A warming to BT?
Liberal Democrat leader Jeremy Rowe says it is possible there may be some merit in shared services and there’s a need to explore that without ruling it out completely. “I would like to see officers working up a ‘third way’ option and to put all three options in front of the new council.”
Labour councillor Jude Robinson attended the confidential briefing. Her blog gives a good insight into what happened.
“It was an interesting session and explained a lot. I’ve always said we have to consider this proposal seriously but we need evidence and figures to back up the reassurances and promises we have been given. The great mystery now is why councillors have been excluded for so long from this process. Just look where that has got us..
“Cornwall Council has spent huge amounts of time and a lot of money (£1.8 million) on this JV [joint venture] but the way it has been driven through has created tensions and mistrust that could mean this is rejected. £1.8 million is a lot of money for a dead duck.
“We now have only one company interested in bidding for this venture. How can Cornwall Council put a tender out to one company and be sure of testing the market and getting the best value? is it even legal according to the constitution?
“To their credit, BT have done a lot of work over the past two years with officers of the council. They are still here but now, at the very end of the process it looks very uncertain. The Council has not even considered other options properly and it would be wrong to go for this just because it is on the table when we don’t know what other alternatives may deliver.
“It would also be politically outrageous to award a contract that commits the next council – after elections – to major change and risk without a democratic mandate.
“Will BT hang around or cut their losses? Will Cornwall lose out what could be a very positive offer because of the way this has been mishandled?”
BT’s briefings seem to have had an effect on some councillors; and staff get the impression their jobs are uncertain if they stay with Cornwall council but, if they join BT, they will come under the company’s current policy of no compulsory redundancies. And they’ll get BT broadband for £1 plus other offers.
It’s by no means certain that the full council will vote next week to reject an outsourcing deal. If it votes in favour of a deal that will be quite a victory for BT, Lavery and some on the council team who appear to believe that BT can cut costs, transform services, make a profit and employ hundreds more people without any downside.
Lavery’s letter as published on Andrew Wallis’s blog: