Cornwall County Council wins right to terminate BT contract - and is now seeking 'millions' in compensation

Cornwall County Council has won the right to terminate its far-reaching outsourcing contract with BT after a High Court case, which started on 1 December, was decided in its favour. The Council plans to issue a termination notice this week, before Christmas, and to seek damages and costs from BT, which could cost the telecoms and computer services giant millions.

It follows an increasingly acrimonious relationship between the two organisations, with Cornwall Council accusing BT of failing to achieve agreed goals, and BT filing an injunction in August in a bid to prevent the Council from terminating the contract.

"Today, the Judge gave his judgement after hearing the evidence from both sides. I am very pleased the judgement was in favour of the Council. This judgement confirms our 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 the Council was justified in reaching the decision to terminate the contract," wrote councillor Andrew Wallis in a blog post today.

Wallis had been one of the driving forces among Cornwall's councillors arguing for a termination just two years into the ten-year contract.

Now, says Wallis, the Council will pursue BT for costs and damages. "The Council will be seeking payment of its costs from BT Cornwall in connection with this legal action. From this, the Council intends to hold discussions with BT Cornwall to agree the level of damages the Council will receive. This could run into the millions."

Wallis added that the Council now intends to provide notice of termination before Christmas, with changes taking effect in January, including the transfer of approximately 250 staff back in-house.

The following services will transfer back to the authority, according to Wallis: HR Transactional Services, including Payroll; HR Employment Support; First Point Helpdesk; Financial Processing; ICT; Despatch; Printing; and Telecare.

The relationship between the two organisations burst out into the open earlier this year with Cornwall threatening to terminate the contract as a result of what it claimed was generally poor service from BT, reflected by a string of missed performance targets.