The High Court has ruled that Cornwall Council is within its rights to terminate the multi-million pound services outsourcing contract with BT because BT “did not provide … the service it had promised to the standard it had promised”.
Cornwall Council welcomed the High Court decision yesterday saying “The judge’s decision confirms the Council’s argument that BT Cornwall had been in material breach of the contract due to their failure to carry out services to the required contractual standards and, therefore, that we were justified in reaching the decision that we were entitled to terminate the contract.
“As a result of this decision, the Council intends to give notice of the contract before Christmas but there will be no immediate change in the arrangements as notice will not take effect until January.”
BT was awarded the 10-year contract in 2013 amid much controversy as was widely reported including here on TTA. It was to deliver major savings to Cornwall Council and create a significant number of new jobs. The contract included outsourcing of many back office services and the telecare and telehealth services. The council has stated that it is not expecting any of the telecare and telehealth services to be affected by this decision.
The court case was initiated by BT in an attempt to get an injunction against Cornwall Council’s plans to terminate the contract on grounds of material breach of contract. This has backfired spectacularly and BT must clearly re-examine the advice it received with regard to this court action.
An internal report of a review of the “Strategic Partnership” in April this year noted that “the contractual arrangements entered into were not those anticipated by any of the parties when BT became the Preferred Bidder. Further, in the timescales applicable, it was not possible to revisit the Service Delivery Agreement with the level of due diligence and analysis that would have ideally been the case.” In other words the contract was rushed through after the full council eventually voted to accept the much reduced scope contract with BT.
This is a good day for public services in the UK where many deals have been done with private companies in recent years in the face of severe funding restrictions, strong local opposition and widespread skepticism. It is a good day because Cornwall has shown that proper scrutiny of promises made at the start of a contract is indeed possible, however complex the contract, and where the supplier fails to deliver they will be fired.