Barnet Council is planning to bring a range outsourced services back in-house in a major U-turn on the Capita contract.

A review of the contract with the private provider could see seven services brought back under the council’s control after a report admitted there were areas of ‘persistent poor performance’ in the outsourcing model.

The council has two major contracts with Capita, to deliver back office services and development and regulatory services, which were signed in 2013.

But since then the firm – which posted a £500 million loss during 2017 – has come under fire for ‘serious failings’ in pension management and has been fined by the council over accounting failures.

Last month, the council was called on to take financial reporting back from Capita’s control after a report revealed a £9.5 million black hole had opened up in the local authority’s budget for the coming financial year.

The council’s policy and resources committee will discuss the Capita contract review and consider a range of options for service delivery at a meeting on July 19.

If it decides to go ahead with the report’s recommendations, finance, strategic HR, management of the council’s land and property, highways, regeneration, strategic planning and cemeteries and crematoriums will be brought back in-house.

But the council is expected to stop short of axing the contracts completely, meaning Capita would retain control of 17 services including revenue and benefits, planning applications, IT and customer services.

The council’s Labour group, which opposed the outsourcing plans before the contracts were signed, said it would support plans to bring them back in-house.

Labour leader Cllr Barry Rawlings said: “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.

“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.”

Barnet Council claims the partnership with the firm has led to significant financial savings, as well as efficiencies and improvements across a range of services.

Council leader Cllr Richard Cornelius said: “Our priority is to deliver good quality, value-for-money services to our residents. Many things are working well and it’s right that we build on them. Where this is not the case, changes are needed.

“The committee will discuss the proposed review to realign services delivered under the Capita contracts.

"If the committee approves the recommendations, the review will develop more detailed proposals, but it’s important to stress any changes will only be recommended on the basis that they provide 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.”