A report just published by Barnet Council in the name of Conservative Leader, Richard Cornelius, proposes options to bring several services currently run by Capita across two contracts (CSG and Re) back in-house.
The preferred option is to bring the following services in-house: strategic finance, strategic HR, estates, health and safety, insight, social care direct, regeneration commissioning, highways, economic skills and development, cemetery and crematorium, strategic planning.
A third option of ending the contracts entirely is included in the report.
The report states there have been performance issues with financial controls and reporting; pensions administration; estates; and user satisfaction with back office services, and the operation of the Highways service.
The report goes on to say: "The environment in which local government is operating has also changed since the contracts were let. Whilst both contracts envisaged the need to adapt to changing circumstances, it is recognised that, as well as a longer than forecast period of austerity, the outsourcing market has changed over time. In addition, the rapidly changing external environment has accentuated the need for the council to increase the level of direct control it exercises over the levers that affect its strategic direction."
Leader of the Barnet Labour Group, Cllr Barry Rawlings said: "Barnet Labour Councillors have opposed the mass outsourcing of local services since it was first proposed by the Conservatives in 2008, and they have finally conceded that we were right.
"Our main reasons for opposing the mass outsourcing were:
- that the Council would lose control of services while still retaining ultimate accountability when things go wrong,
- the quality of services deteriorates as cuts are made and staff terms and conditions are eroded, in order that that the contractor can make a profit,
- services that generate an income for the Council should be retained so the Council and the Borough benefits from that income, not a private company,
- tying up so many of the Council's services with a private contractor for 10 years gives the Council no flexibility to deal with reducing budgets, demographic changes and national policy changes,
- private companies tend to overbid for these large contracts and under deliver,
- private companies do not have the same public service ethos and values that are expected from public services by residents,
- the risks of mass-outsourcing outweigh any potential savings which may or may not materialise.
"We raised these concerns before the two Capita contracts were signed, amongst many other concerns, but the Barnet Conservatives were content to be back-seat passengers while control of strategy was handed to an unaccountable private company which had different priorities and was subject to the whims of the stock market rather than the wishes of local residents.
"This change of direction and admission of defeat - only a couple of years after the first reviews of these contracts took place and the arrangements were renewed - must have been known before the local elections.
"The Conservatives clearly decided not to admit the failure of their central ideology of mass-outsourcing during the local elections, which raises the question as to how honest they were with voters in the run-up to the local elections.
"We will support any move to bring our services back in-house - something we pledged to do in our local election manifesto.
"Years of cuts because of failed national Government policies have left councils in an awful position and there are difficult choices to be made. Decisions about our services need to be made by accountable, elected councillors entrusted by local voters.
"Mass outsourcing was a gamble made by the Conservatives. It, and they, have failed the people of Barnet. It is time to take back control."
1. A copy of the P&R report 'Review of Capita Contracts - Strategic Outline Case' (Agenda Item 8):