Cornwall Council will this month begin insourcing ICT staff after BT Cornwall (BTC) failed to gain an injunction preventing the termination of a 10-year outsourcing deal.

The deal, covering ICT, telehealth and other back office functions, was originally signed between the company and the council, Cornwall Partnership NHS Foundation Trust and Peninsula Community Health CIC in 2013.

Shortly before Christmas, a High Court judge ruled that the public sector partners were entitled to cancel the contract after BTC failed to meet performance targets, including a promise to create a set level of new jobs.

The judgement said: “Assessed as at 20 July 2015, BTC was in breach of the agreement such that the defendants were entitled in all the circumstances to terminate the agreement forthwith.”

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BTC’s monthly review reports showed that between November 2014 and April 2015 service in relation to one indicator was below target service level six times, and below the breach trigger five times.

Between October and December 2014, another indicator was below target service level for three consecutive months, of which one was below the breach trigger.

The firm only created 35 of the 111 jobs it was committed to in the first two years of the agreement, the council said, which meant it was in breach of the agreement.

BTC had argued that closing historic incidents would have caused a dip in KPI performance and impacted on the service desk’s ability to respond to new incidents.

However, the judge said that these issues were for BTC to deal with, applying whatever resources it took and that “in contract, it was already obliged to resolve the backlog. It was not entitled to protection from the consequences.”

The court also heard that in June 2015 Phil Healy, the director of technical assurance and rapid response for BT Global had sent an internal email referring to new figures showing BTC was in breach of performance indicators, which read: “Where did the new ones come from since Thursday? Need to use poetic license & [g]et the buggers out.”

The judge rejected evidence from Healy in which the BT manager said that the email was a joke to a friend, saying: “…I conclude it was not a joke and that it reflected both a recognition that things were serious and a preparedness to take inappropriate steps to avoid that”.

In addition, the judge found that the service delivery agreement between the partners was very hard to work with due to its “impractical length, and the imprecision in some of its drafting”.

“It runs to several lever arch files without that length providing clarity in return,” he said. “Its oversight and governance arrangements proved inadequate for all parties when things started to go wrong.”

In his conclusion, the judge said: “Ultimately it is the public that is affected by this dispute, and by the shortcomings in the drafting of the agreement and the failings in performance under the agreement.

“It is very much to be hoped that all parties to the dispute will consider the position carefully, in the interests of the public, and take steps now to avoid a similar situation in the future, in Cornwall and elsewhere.”

A statement released by the council said: “The council is satisfied that this is the correct decision and would like to reassure local residents who currently receive telehealth and telecare services from BT Cornwall as part of this contract that these will continue without interruption.

“The process of transferring staff and services from BT Cornwall to the council and our public sector partners will begin in January and will be completed as quickly and smoothly as possible.”

A BT spokesperson said, “We are disappointed that the High Court has ruled in favour of Cornwall Council. We are reviewing the judgement carefully and considering its implications.

“We will be meeting with the council at the earliest opportunity to discuss the full impact of the court’s decision on BT Cornwall.

“In the meantime, BT Cornwall will continue to provide high quality services for the residents of Cornwall that are meeting all key performance targets and bringing operational savings.”

The cancellation of the BT contract follows similar terminations of council partnerships between the company and local authorities in Lancashire and Liverpool.