Capita agree to pay Barnet Council £4.12m compensation for poor performance on outsourced contracts

Cllr Richard Cornelius. Picture: Polly Hancock

Cllr Richard Cornelius. Picture: Polly Hancock - Credit: Polly Hancock

Under-fire contractors Capita have agreed to pay Barnet Council £4.12m to compensate for outsourced services which have been “not up to scratch”.

The town hall today announced they had negotiated the figure as recompense for “historical commercial issues, including delivery of IT improvements in Adult Social Care and delays in delivering housing on council land”.

The announcement, made in a report to be voted on at a meeting of the council’s urgency committee on Friday November 30, confirms the news – which leaked last week after an email from the council chief executive – that the council will not be considering the full business case for bringing its Capita contracts back in-house this year and instead will recommend a phased approach.

This will see the December 11 meeting of the policy and resources committee likely to push through plans to return finance and strategic HR functions to council control by April 2019.

Council leader Cllr Richard Cornelius said: “While the contracts with Capita have saved millions of pounds a year, there are some services which have not been up to scratch.

“What’s important is that we take action and taxpayers can be confident we are managing their resources effectively. Agreeing this settlement payment represents a good deal for the council.”

Last week, Barnet’s Labour opposition criticised the “undemocratic” decision not to consider the business case of the Capita contracts as was voted by councillors from both parties in July.

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Opposition leader Cllr Barry Rawlings said: “Given the scale of the failures highlighted in the Grant Thornton review of the council’s financial control environment, and the litany of poor performance in other Capita-run services like pensions administration, the council should be progressing quickly to terminate its relationship with Capita.”

Over the past year, groups such as Barnet Unison and the Barnet Alliance for Public Services (BAPS) have called for the council to pull out of its CSG and Re contracts with Capita, especially in light of the fraud discovered late last year when a Capita employee – Trishul Shah – working on the Re contract stole over £2m from council coffers.

This money has been repaid.

This fraud led to the independent Grant Thornton review that found a number of failures on the part of Barnet Council and Capita’s financial management.

Capita’s local government chief Jonathan Prew, said: “We recognise that some aspects of our service to Barnet Council have not met the standard we and our client expect.

“We are committed to getting this partnership right, so we can carry on delivering vital savings for council and for taxpayers.”