The Capita Investment

The latest row over the council’s ‘One Barnet’ sell-off of services to Capita erupted last week when it emerged that – contrary to the way the Conservatives spun the deal – the council is actually having to foot the bill for the £16million investment in its IT systems.

When awarding the contract the Conservative council said that Capita “will also make” an investment in IT, and that it was an “upfront investment”.

Indeed, Council Leader Richard Cornelius stated in the council press release “The combination of a saving to the taxpayer of a million pounds a month, alongside an upfront investment in improving the service makes this a very, very good deal for the Barnet taxpayer.”

It turns out on closer reading of the voluminous documentation that in reality Capita’s £16m investment will be “recovered through the core service payments made by the Council” – in other words, Barnet council is paying for it.

At the recent Cabinet meeting I described this as “sleight of hand” but it’s more a failure of transparency by this Conservative council.

Labour councillors were pilloried by the Barnet Conservatives for suggesting that the council could make the investment themselves more cheaply than Capita – and now we learn this is essentially what is happening!

Many people, including the local bloggers who have written extensively about the investment issue, feel misled about it.

We have always said the Capita deal looks almost too good to be true, that there was a risk that it couldn’t be delivered, and that the council could end up seriously out of pocket if it all goes wrong.

Obviously, time will tell but when 325 jobs may be lost from Barnet under the deal, and with the news that the IT investment isn’t quite what residents were led to believe, who could be blamed for agreeing with us?

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