Barnet Council to bring work outsourced to Capita back in-house by 2026
London borough is bringing swathes of outsourced services back in-house next year, with more to follow by 2026
Barnet councillors have voted to end the London borough’s outsourcing contract with Capita by 2026 and will bring work, including IT, back in-house.
Some services have been extended to prepare for being brought back in-house, which the council said will return 370 staff to work directly for it.
Members of the council’s policy and resources committee meeting voted in favour of ending the contract. The 10-year contract, signed in 2013, includes HR, finance, IT and estates, as well as customer services and revenues and benefits.
It was originally known as the One Barnet programme and was seen as a flagship for councils in future. But there have been concerns over the quality of delivery of the contract over the years. A 2018 report recommending that HR and finance services, then provided by Capita, should be brought back in-house.
Conservative Richard Cornelius, who was Barnet Council leader at the time, admitted that although parts of the outsourcing deal had “saved millions of pounds a year, there are some services which have not been up to scratch”.
Following this week’s council vote, most privatised services are set to move in-house next year, but IT, customer services and revenue and benefits contracts will be extended until 2026 because it would be complicated and costly to move them immediately.
Labour, which now controls the council, pledged in its manifesto to bring privatised services back in-house. Barry Rawlings, current leader of Barnet Council, said the vote was the first major step towards bringing privatised services back in-house. “It shows our commitment to providing value for money for all our residents,” he said.
Read more about Barnet Council’s outsourcing
- Barnet Council is planning to bring parts of its Capita outsourcing deal back in house, and expects the supplier to pay the council £4.12m due to delivery issues with some areas of the contract.
- The internal audit reports show a series of failings by supplier Capita, such as “no documented IT disaster recovery plans” and gaps in change management processes.
- The second most senior judge in England and Wales will hear a legal challenge against Barnet Council’s outsourcing programme.
Rawlings added: “Most of the services outsourced by the previous administration will be back under direct council control by next year. The decision to run services in-house will save Barnet’s council taxpayers money and return 370 staff to direct employment by the council. The remaining Capita contract, customer support group, will close by 2026, before the end of our administration’s first term.”
The contact with Capita also included Regional Enterprise, a partnership to run services including highways, planning, regeneration and development, and environmental health. All these services will be brought back in-house.
Rawlings said: “HR and finance will be extended for just 12 months. However, IT, customer services and revenues and benefits are more complicated to bring back straight away and doing so would cost council taxpayers £2.6m each year, which would result in redundancies and cuts to services.
“Instead, the council will extend the contract for these services until March 2026, which will provide a saving of £254,000 and allow the council more time to make arrangements for the future of these services in the shortest timeframe.”
A Capita spokesperson said: “In the last nine years, our teams have successfully delivered a range of key services in Barnet.
“We look forward to working with the council to deliver services through Regional Enterprise up until September 2023. The extension on other services will see us build on our track record of delivery and save Barnet Council £254k, as well as preventing £2.6m in additional costs per year.”