London Borough of Barnet is considering proposals to bring 11 services back in-house — including finance and accounting — in a move that could spell an end to its “easy council” approach.
The council achieved notoriety in 2012 when it decided to outsource up to 70% of its services through a separate joint venture company established with Capita.
Room151’s Annual Conference – September 20th, 2018, London Stock Exchange
Local Authority Treasurers’ Investment Forum and FDs’ Summit
“…as a place to network, discover how other local authorities are managing their treasury portfolios, and to explore new ideas with colleagues in both the public and private sector, it is exceptional.”
Finance Lead (Capital & Treasury), Manchester City Council
But a report to the council’s cabinet this week recommended a rethink of the policy in response to the outsourcing giant’s financial problems and continuing austerity.
The council report said: “Capita’s focus in future will be delivering technology-enabled services, at scale, where the company believes it can add the most value to service delivery.”
Capita’s change of strategic direction — including a sale of treasury adviser Capita Asset Services — occurred last year after issuing a series of profit warnings.
The council added: “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”.
In response, the council says it prefers the option of bringing some services back in-house, rather than a wholesale insourcing, or continuing with the existing arrangements.
Finance and accounting — apart from transactional services provided from a shared service centre in Darlington — are among the services earmarked for a return to direct council provision.
Others include estates, strategic human resources, some social care services, regeneration commissioning, highways, economic skills and development, cemeteries and strategic planning.
Another 17 services, among them printing, payroll, pensions administration, customer services, development control, trading standards and licensing, would continue to be outsourced to Capita.
Officers at the authority will now work on defining the best way forward and drawing up a business plan for changes.
Richard Cornelius, Barnet’s council leader, said: “Many things are working well, and it’s right that we build on them. Where this is not the case, changes are needed.”
Cornelius said that changes would only be recommended if they offered a good deal for the Barnet taxpayer.
Jonathan Prew, managing director of Local Public Services at Capita, said: “The proposed review is an opportunity to respond to changing circumstances and needs that have evolved over the last five years to ensure that a future partnership is focused on providing services that will deliver best value for residents and all stakeholders.
“Our partnership has achieved significant financial benefits, and we continue to be focused on strengthening our performance where we need to and delivering quality services across the borough.”
The chief executive and leader of the council have resigned from the board of the joint venture, Regional Enterprise, to avoid conflicts of interest during the review period.
