By Tony Collins
Will Barnet Council ever be as open as Cornwall Council has been over the performance of its IT outsourcing supplier?
Two years ago Cornwall signed a 10-year £260m strategic “partnership” with BT. The word “partnership” seems odd now that BT has taken out an injunction against Cornwall to stop the council ending the relationship 8 years early.
The two sides will go to court in December to determine if the council has a right to terminate the contract now.
If it loses the case, Cornwall will have to retain as its main IT services supplier a company that has been its High Court adversary. The judge may also order the council to pay BT’s legal costs.
The odds may be against Cornwall’s winning because BT has much experience in outsourcing legalities. It’s possible that its managers have been collecting evidence of any council shortcomings from day 1 of the contract, in case the relationship turned sour.
But independent Cornwall councillor Andrew Wallis says on his blog that BT is dragging the council to court because of BT’s own failings. The council says BT has not achieved its key performance indicators or met to its guarantees on creating new jobs.
Cornwall threatened to terminate for breach of contract but did not do so while it was in talks with BT’s senior corporate executives. When an amicable termination could not be agreed BT instructed its lawyers to seek an injunction preventing the council from terminating, which they did at a hearing on 12 August. The result was that the High Court agreed to an expedited trial that will start on 1 December 2015.
It’s all a far cry from the time two years ago, before the contract was signed, when BT and council officers were promising much, and saying little about what could go awry.
In its literature, amid beautifully-executed artwork and graphics, BT highlighted its success at South Tyneside Council, its sponsorship of events such as Comic Relief, Children in Need and Childline and its presence as one of the largest employers in the South West.
Similarly, Cornwall officers, in 2013, wrote reassuringly about any forthcoming deal with BT. They said:
“It should also be borne in mind that strategic partnerships are nothing new. BT – and other councils – have been involved in them for more than 10 years.
“Similarly the outsourcing market is mature and well understood. The UK local government IT and Business Process Outsourcing market is the biggest outsourcing market in the world and there are over 100 deals in operation.
“Risks are sometimes managed well and sometimes managed badly. The risks have been mitigated by using expert advisors and the Council has senior officers who understand this territory well.”
A BT spokesman told Government Computing this week:
“BT has commenced legal action to ensure fair and proper handling of the issues which have arisen about BT Cornwall, and while this is taking place, it would be inappropriate for us to comment.”
How is Capita’s performance on its contract at Barnet? We don’t know. The success or otherwise of the deal is blanketed in secrecy. In May Barnet blogger Mr Reasonable offered to make a charity donation of £250 if the council showed it was making the promised savings. The money went unclaimed.
There is no evidence of any failure of Barnet’s outsourcing deal. But would the public or media ever know if the supplier’s performance was falling short of the council’s expectations?
Cornwall has many independent councillors (36 compared with the 37 ruling Liberal Democrats). Debates tend to be on the merits of the matter not on the basis of party politics.
Barnet’s policy is tied in with a political ideology: ruling councillors want to turn Barnet into a “commissioning council” which involves outsourcing as much as possible.
In practice the bedrock of this ideology is the relationship with Capita. If it went wrong would Barnet have too much to lose to go into dispute? For the sake of its ideology would Barnet accept any quality of service Capita delivers?
In threatening BT with termination because of breaches of contract, Cornwall Council could be criticised for not letting a 10-year outsourcing bed down. It’s unusual for a strategic partnership to end up in court less than 3 years into a 10-year contract.
On the other hand BT promised to create jobs in year 1 and 2 of the contract that the council say have not materialised. Councillors and officers are unhappy about many other aspects of the deal. BT took on about 280 full-time equivalent council employees, about 130 of whom worked in Information Services.
What’s striking about the history of outsourcing discussions at Cornwall, and the run-up to the signing of a contract, is its openness. It would be easy for BT’s defenders to say that Cornwall’s open, feisty and unforgiving attitude are factors in the strained relationships so far.
On the other hand the problems Cornwall has experienced in the first 2 years of the relationship may be normal in outsourcing deals at other councils. It’s just that ruling councillors and officers don’t talk about them in public.
All the more credit to Cornwall for its openness.
Barnet’s outsourcing deal may be more successful than Cornwall’s – but how does anyone outside a small group at Barnet really know? Local government and democratic accountability are often uncomfortable bedfellows.
Thank you to Dave Orr who drew my attention to the latest developments at Cornwall Council.
Overview of BT Cornwall’s performance against commitments and guarantees – as perceived by Cornwall’s officers
KPI measures Achieved (185/289) – 64%
PI measures Achieved (266/402) – 66%
Service Transformation (percentage of plans completed) – 38%
Financial contractual baseline savings (10% & 11.6%) – 100%
Trading gain share received (est £17.4m over 10 years) – £0
Guaranteed new jobs in Cornwall (yrs 1 & 2 111 new jobs target / 35.1 created) – 32%
Committed new jobs in Cornwall (yrs 1 & 2) – 0
Some of BT’s pre-outsourcing deal literature for Cornwall’s councillors
- BT is a FTSE 100 company
- We are one of the largest employers in the UK and the SW
- We currently employ > 5,900 people in the South West including 1,028 Cornwall residents
- BT already makes a financial impact of over £749m a year in the region
- BT spent >£145m with local suppliers in 2011/12 and will increase this substantially through the Partnership
- We generate 142,000 fraud referrals each week for the DWP across 50 data sources from 260,000,000 records
- We undertake c.1,000,000 criminal record checks per annum at Disclosure Scotland to safeguard vulnerable groups.
- We provide the highly secure directory services for the 260,000 military and civilian defence staff
- We collect circa £580,000,000 in tax revenues each year on behalf of our local authority partnerships
- The NHS Spine platform exchanges £3.5m prescription messages per week
- We are delivering in excess of £500,000,000 savings in partnership with six UK Councils through efficiency and transformation programmes
- We run one of the worlds largest data warehouses to enable the timely anonymous collection of patient data and information for clinical and billing purposes other than direct patient care .
- Yes, we do poles and wires…but did you also know in the public sector we process over 532,000 benefits assessments for new applications and change of circumstances each year in our Local Government Partnerships?