Latest Public Sector News

23.11.18

Capita to pay more than £4m compensation to Barnet Council over contracts performance

Capita has agreed to pay Barnet Council more than £4m in compensation for poor performance and services that were “not up to scratch.”

The council has now published a report proposing that councillors agree a £4.12m payment from Capita to settle “historical commercial issues” which includes the delivery of IT services in adult social care and delays in delivering housing.

The report, which will be put in front of Barnet’s Urgency Committee on 30 November, would also see under-fire Capita continuing to provide services until at least next year.

It will also end the current gainshare arrangement, meaning the council will be able to keep 100% of all savings achieved through “better and simpler” procurement.

Gainshare payments to Capita last year reached £2m.

Leader of the council 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. The proposed settlement will be put forward at committee next week for members to consider.”

He added: “Rest assured; a review of all the services is ongoing and we are making progress.”

Barnet Council also announced it was recommending taking back Finance and Strategic HR services from Capita to council control by April 2019 in order to address performance issues.

This recommendation will be made to the policy and resources committee on 11 December, with delivery arrangements for remaining services to be considered in due course.

The managing director of Capita Local Public Services, Jonathan Pew, said: “We recognise that some aspects of our service to Barnet Council have not met the standard we and our client expect, and regrettably this detracts from the positive improvements we have made to some of the services across the council.”

The council said back in June it was considering taking a series of Capita contracts back in-house after identifying a number of services which required performance improvements, and published a report proposing a full review of the partnership be undertaken.

In September it was revealed that a Barnet council contractor had managed to steal £2m using fraud, and that “insufficient financial controls” were in place to prevent the fraud.

Capita was in the news earlier in the year too when the company reported a substantial fall in profits, although government ministers denied that the situation was going to follow the collapse of Carillion.

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