27 February 2009
BT, Unison and Essex County Council (ECC) have become embroiled in a bitter dispute over an outsourcing contract.
BT plans to sue the local authority after claiming it unlawfully terminated an IT support deal.
The contract, reportedly worth £34 million a year, was cancelled in September 2008 with around three and a half years remaining according to Kumar Sandy, regional officer at trade union Unison.
"We are disappointed Essex County Council has terminated our contract," a BT spokesman said.
"Having discussed the position with our lawyers, we can confirm we will be seeking substantial damages."
A spokesman for ECC said: "Essex County Council will act decisively when we judge that any contract is not delivering value for money and will take appropriate action."
Leader of the council, Lord Hanningfield, added: "We are determined to deliver better services at a better price for Essex taxpayers, which Unison seems not to support."
Unison has criticised the council's outsourcing policy. It said the IT contract with BT had been brought in-house because of poor quality, yet the council still wanted to go ahead with other deals despite "disastrous" experiences with contractors.