Liverpool plans to end BT joint venture
LIVERPOOL City Council wants to end its joint venture with BT, Liverpool Direct.
The partnership was established in 2001 to handle a number of council services such as human resources, IT, payroll and benefits services.
Three years ago the contract was extended until 2017 but the council wants to bring the services back in house due to cost savings.
A report going before the council’s cabinet today states: “In the early Autumn of 2013, both parties were in active discussions in an effort to resolve the serious financial savings Liverpool City Council needed to make between 2014 and 2017.
“As a result of these discussions and negotiations, BT agreed a further price reduction of £5m contribution to the budget process for 2014/15 together with a further £5m for the following financial year. Whilst the Council really appreciated BT’s continued commitment to the city, the current budget deficit would require a far more substantive financial contribution from the contract both for 2014/15 and for future years.
“Unfortunately BT feels unable to commit to any further price reduction within the contract as they need to sustain their own financial position. Moreover, the city council is now well placed, as a result of the long collaboration with BT and the learning gained from the partnership, to continue to drive forward business transformation and run the services with consequent cost savings to the city.”
In a statement Mayor Joe Anderson said: “BT and Liverpool City Council have enjoyed a long and successful partnership through LDL, bringing commercial expertise, transforming services and bringing in resources to the city. LDL has created over 300 jobs and generated multi-million pounds worth of savings since July 2001, as well as bringing in around £90m investment and avoidable costs for the residents of the city and the city region.
“This transformation has only been achievable due to the sustained collaborative working between BT and their respective teams of staff. However, as part of our three-year budget strategy – to find £156m savings following government funding reductions – we are reviewing all services. I believe it is now time to move LDL in a new direction.”
Neil Rogers, chairman of LDL and president of global government for BT Global Services, said: “Both BT and LCC agree that now is the right time to set a new direction for the relationship between us. LDL has had great success and was groundbreaking in its day but BT is working with LCC to agree whether a different approach would better help the city meet the increasing challenge it faces.”
