An outsourcing company’s stock has plummeted after it cuts its profit forecast.

Capita, a company which handles various services for Barnet Council including planning, announced a cut in its profit forecasts to £270-300million, which resulted in its shares plunging to 41 per cent.

During Barnet's full council meeting on January 30, a motion was passed unanimously, calling for contingency plans to be put in place if Capita was to have a similar fate of the firm Carillion, which collapsed only two weeks previously.

Leader of Barnet Labour, Cllr Barry Rawlings, said: "At full council the Barnet Conservatives showed breathtaking complacency in stating they had no concerns about their contract with Capita.

“This was just the day before Capita’s share price crashed and they sought £700 million from shareholders.

“Barnet residents are ill-served by such an irresponsible attitude. This cannot continue if residents’ services and council tax payers’ money are to be properly protected.”

Barnet Council leader, Cllr Richard Cornelius, said: “We supported Cllr Rawlings’ motion because, in the wake of Carillion’s collapse, the Conservative administration had already moved to refresh its contingency plans and to review Capita’s financial status.

“This is what any responsible local authority would do and the process was underway well before Cllr Rawlings moved his motion.”

In an announcement from Capita earlier today (January 31), the newly appointed chief executive, Jonathan Lewis, called the firm "too complex" adding that it is driven by "a short-term focus and lacks operational discipline and financial flexibility."

Mr Lewis took up his position in December last year, and has appointed a chief transformation officer to implement a transformation plan of the firm.

At present, there are no plans to alter the arrangement between Barnet Council and Capita.