Liverpool City Council will save £30m over the next three years by insourcing its joint venture with BT which provided its ICT services, it has revealed.
In February, the council voted to end its Liverpool Direct Limited (LDL) arrangement with BT after negotiations over a reduction in the contract price ended in stalemate.
And a report to city councillors this week said that the move should deliver £30m of savings between 2014 and 2017.
In a statement, Liverpool mayor Joe Anderson said “LDL has successfully delivered services and service improvement throughout its life. The relationship with BT has been central to this success.
“We are grateful that BT remains committed to serving residents and businesses in Liverpool but it is timely, given the continued financial climate for LDL to move in a new direction to become fully integrated into Liverpool City Council.”
The report said that a revised set of accounts for LDL had been submitted to the company’s auditors which “significantly increased” the level of provisions within the company which was offset against the BT management fee.
This meant that the company has sufficient cashable assets to cover liabilities to the end of September 2014, meaning “the correct levels of cash are held within the company at the point of transfer of ownership”.
“This delivers the best value option for Liverpool City Council, reflecting an internal service delivery model with no further investment requirement from BT and hence no return needing to be paid to BT for such investment,” according to the report.
The ownership of LDL will be fully transferred to Liverpool City Council on 31 October 2014, and the company will cease to trade after the 31 March 2015.
The council said the cost saving would be achieved by reducing duplication, stripping organisational costs, reduced financial impacts of being a BT subsidiary and reduced management capability.
The chief executive of LDL will remain in post until the company ceases to operate.
“Further rationalisation of the LDL management team will take place in line with the transition of services to Liverpool City Council,” the report said.
