Lancashire pulls out of One Connect Limited

Lancashire County Council has become the latest council to insource services from a joint venture partnership with BT.
The council announced on Friday that it will resume the running of services ranging from welfare rights to human resources, which had been provided by One Connect Limited (OCL), a company it owned jointly with the provider.
The company will now be renamed BT Lancashire Services, with the council relinquishing its 40 per cent shareholding.
The renamed company will see its role restricted to delivering ICT, revenue, benefits and payroll services for the council.
Council leader Jennifer Mein said: “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.”
A statement from the council said that the revised arrangements would help deliver further efficiencies.
Hundreds of county council staff currently seconded to One Connect will return to the council, with the remainder continuing their secondments as part the new company.
The new arrangements will take effect from 31 March 2014.
To oversee the work of the new company, senior representatives from both organisations will regularly meet to review progress.
Tony Chanmugam, chairman of OCL and BT Group chief finance officer, said the reorganisation was a “key milestone” in his company’s relationship with the council.
He said: “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.”
OCL was set by the council’s previous Conservative administration in May 2011 with the aim of saving the council around £400m over 10 years.
The company faced controversy recently over payments in excess of £600,000 for the financial years 2011/12 and 2012/13 from the council to OCL chief executive David McElhinney, who resigned in August.
A council report in December also revealed that there had been a shortfall of £6.6 million in expected procurement savings from using the company over two years to the end of 2013/14.
In an unconnected move, Sandwell Council has announced it will end its outsourcing contract with BT by March, a move the council estimates will save up to £4.5 million a year from April 2016.
And Suffolk County Council has also decided to insource its finance and human resources functions, concluding that the move would be cheaper than continuing its outsourcing arrangements with BT.