Barnet Council to look at contingency plans for outsourced services as Capita shares plunge 41%

Barnet Council are to consider contingency plans for outsourced services in the wake of the Carillion collapse, following a request from Labour councillors at last night's Full Council meeting (30 Jan).
 
A motion from the opposition Labour Group Leader, Cllr Barry Rawlings, which was passed unanimously, highlighted the large number of outsourced services in Barnet including parking enforcement, education services and the two massive contracts with Capita that deliver all back office services (Capita CSG) and development / regulatory services (Re Ltd). 
 
In speeches, Labour councillors raised concerns about Capita, including a number of profit warnings and a share price that has fallen by 60% since the contracts with Barnet were signed.
 
This morning it has been reported that Capita's share price has plunged a further 41% today following their announcement of another profit warning, a dividend suspension and a £700 million cash call.
Senior Local Government Officer, Joanne Fry, commented in an article in the Guardian earlier this week that "Carillion mainly ran large private finance initiative contracts - building hospitals, for instance. But firms like Capita, Serco and Veolia run a huge range of different council services, from IT and HR to waste collection, recycling, street cleaning and maintenance. If they were to fail, the risk to councils would be very high."
Leader of the Barnet Labour Group, Cllr Barry Rawlings said: 
"It's been just two weeks since the collapse of Carillion, and now today we have very worrying news about Capita who deliver Barnet's crucial back-office, development and regulatory services.
"Last night at Full Council the Barnet Conservatives showed breathtaking complacency in stating they had no concerns about their contract with Capita.  This was just the day before Capita's share price crashed and they sought £700 million from shareholders. Barnet residents are ill-served by such an irresponsible attitude. This cannot continue if residents' services and council tax payers' money are to be properly protected."
 
"The Council must ensure that we have robust contingency plans in place for all our outsourced services."
Ends.

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