Lancashire County Council scraps joint venture with BT

Lancashire County Council has ended a joint venture with BT less than three years into a 10-year contract that promised to save the local authority over £300 million between 2011 and 2021.


Lancashire County Council has ended a joint venture with BT less than three years into a 10-year contract that promised to save the local authority over £300 million between 2011 and 2021.

ComputerworldUK revealed the council’s plans to outsource its IT, customer service, HR and payroll and procurement functions in May 2011. Since then, these services have been carried out under One Connect Limited (OCL), a strategic partnership in which BT had a 60 percent stake and Lancashire County Council the remaining 40 percent.

However, in a joint statement late last month, the partners announced that a number of services, including welfare rights and human resources, would be brought back in-house from 31 March 2014, following a strategic review. BT will continue to deliver ICT, payroll and revenue and benefits services to the county council.

One Connect Limited will become a wholly-owned BT company and renamed as BT Lancashire Services Limited. There will no longer be a joint board of directors. Instead, senior representatives from the council and BT will work together to regularly review progress.

Hundreds of council staff currently working under OCL will return to the council and some will continue their secondments to OCL to work on the remaining outsourced services. In 2012/13, there were 1,229 staff seconded to OCL, comprising 1,093 from Lancashire County Council, 81 from West Lancashire Borough Council and 55 from BT.

Lancashire County Council and West Lancashire Borough Council have a 10-year agreement in place, signed in July 2011, for OCL to provide ICT and revenues and benefits services to West Lancashire.

Leader of the council Jennifer Mein said: "There is no doubt BT’s expertise in cutting-edge technology has been a real benefit in a number of service areas to date and as a forward-thinking council we’ll continue to need that kind of support and innovation.

“The changes allow us to focus on developing that potential in partnership with BT while bringing back services and decisions that sit better in the county council’s structure.”

The council’s interim chief executive, Jo Turton, added: "BT is an important partner of the county council's, not just through the strategic partnership but also in supporting us on several key initiatives including the Superfast Lancashire broadband programme and the creation of hundreds of new BT [contact centre] jobs in Accrington.

"Repositioning the partnership with BT will allow us to focus on securing access to BT's technologies and skills that otherwise wouldn't be available to a local council.”

According to Tony Chanmugam, chairman of OCL and chief financial officer (CFO) of BT Group, the timing of the strategic review had been agreed in advance. “The environment in which local authorities operate is continually changing. We all appreciated that when OCL was created and it was one reason for agreeing that a strategic review would take place at around this time,” he said.

Savings tally

According to OCL’s annual review Lancashire County Council 2012/2013, published last July, the partnership had delivered £14.2 million in savings since the start of the contract. This comprised £6.4 million in 2011/12 and £5.2 million in 2012/13 and £2.6 million savings made as part of the take-on of services. The delivery of the outsourced services cost the council £44.1 million in 2012/13.

Meanwhile, media reports in December revealed that the council was examining the performance and value for money of the joint venture, highlighting a shortfall of £6.6 million procurement savings that had been expected for 2012/13 and 2013/14.

OCL’s IT projects

In terms of IT, OCL’s ICT Service function provides support and advice to Lancashire County Council, 12 districts and boroughs of Lancashire, 1,000 schools, Lancashire Fire and Rescue Service, the Office of the Police and Crime Commissioner. It also provides a full range of ICT services to West Lancashire Borough Council.

The ICT service works across 489 sites and supports 3,900 mobile users, 438 business applications, over 50 approved desktop applications, over 2,100 databases, 16 networks, 50 communication rooms and a data centre. It also provides a customer service desk function called Connect2ICT, a 15,000-strong desktop estate, telephony support, and network and infrastructure support.

One of the IT investments made by OCL in 2012/13 was the implementation of an Oracle R12 Financials IT system, Oracle R12 Payroll with full self-service and an e-portal (Oracle i-Supplier) for suppliers to issue invoices electronically. The adoption of Oracle enabled the integration of finance, procurement, HR and payroll into one business system, which OCL said has allowed a single version of the staff hierarchy to be put in place within Oracle, which has helped to cut down on payroll errors, streamlined approvals and controlled costs.

Other savings were made when IT carried out essential work outside core business hours, which minimised disruption to services and customers, saving the council £29,000 during 2012/13.

OCL also embarked on a project to electronically receive, dispatch, process, store and manage documents, replacing the county council’s aged electronic records management system (CERMS), and introducing a new document handling centre. This intends to be a single service that manages all mail handling, including post, fax, email and web, and scan and index all documents so that they can be seamlessly integrated with the council’s applications.

Among future projects, OCL said in its review that it would be upgrading and replacing PC devices in the next 12 to 18 months, which would involve a move to a “modern” Windows Office productivity suite.

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