Barnet Council is to bring some of the services run by outsourcing giant Capita back under its own control.

The local authority will take control of finance and strategic human resources (HR) operations in a partial U-turn on its outsourcing deals with the firm, which were signed off in 2013 in a bid to cut costs.

The move comes after a series of problems with the contracts, including Capita’s failure to detect a £2 million fraud against the council by one of its contractors and the botched delivery of a new IT system.

Council officers have adopted a “phased approach” to reviewing the contracts, with finance and strategic HR earmarked as priorities.

Further Capita-run services could be brought back in-house if the plans are deemed cost-effective.

But Labour councillors – who want all of the Capita-run services brought back in-house – claimed the council’s approach would cost too much money and was aimed at helping out the outsourcing firm.

At a meeting of the policy and resources committee yesterday (Tuesday, December 11) Councillor Ross Houston, Labour member for West Finchley, said the “thin client” model of outsourcing had been a “complete disaster” because “there is no control of the strategic function of the council”.

He also criticised the lack of a break clause in the 10-year contracts.

Cllr Houston said: “I think given the amount of money spent on taking two services back in-house, we have to have an option of taking the whole lot in-house.”

Cllr Alan Schneiderman, Labour member for Woodhouse, questioned whether the other contracts – due to run until 2023 – would reach their end before the council was able to review them.

He said: “What we are doing is kicking the can down the road until the contract runs out rather than getting to grips with it.”

Council leader Cllr Richard Cornelius assured Cllr Schneiderman the reviews would be done before the end of the contracts.

Cllr Arjun Mittra, Labour member for East Finchley, claimed the council was doing “exactly what Capita wants us to do”.

He said: “I think, to an extent, we could end up being seen as a soft touch and that we can be taken for a ride by potential contractors.

“Capita have failed to deliver a whole set of services – and instead of cancelling the contract, we are effectively helping them.

“We are taking stuff away from them and saying, ‘we should do that ourselves’. That is not a negotiating position – Theresa May could do better than that!”

Labour leader Cllr Barry Rawlings added: “The real driver to me is the political capital Barnet Tories have invested in Capita. They are worried about the fallout.

“When we look at the costs – £650,000 to bring in two of the 28 services – it suggests that if we do this in a phased approach, it will cost millions of pounds.

“I see nothing in here that says it is not better to deal with all of these in one go.”

Cllr Rawlings called on officers to bring a full business case for insourcing all Capita-run services to the next meeting of the committee – but his recommendation was voted down by Conservative councillors.

The report’s recommendations were approved after Conservative committee members voted in favour and Labour members voted against.

Subject to the outcome of a public consultation, finance and strategic HR will be brought back under the council’s control by April next year.