IT problems at a council contractor could hit school finances and lead to staff being paid the wrong amount, councillors have warned.

Problems with the roll-out of new software used by outsourcing giant Capita, which manages the finances of many of Barnet’s council-run schools, have led to delays and possible inaccuracies in staff payroll data.

The complications – which come at a time when school budgets are already squeezed – could lead to “incorrect payments” and “financial loss”, according to a Barnet Council report.

It came at a meeting during which an independent auditor revealed a safeguard often provided as part of outsourced contracts was not included in the council’s deal with Capita.

Cllr Alison Moore, Labour member for East Finchley, told Wednesday’s (May 1) audit committee: “At a time when most of our schools are having really tight budgets, having to wrestle with this must have been incredibly stressful.

“You will know head teachers will have struggled with this throughout the year, because getting their bottom line reliably is quite a tricky thing at the moment.

“It is a question of whether you have to apply for a deficit budget or not, at the end of the day. It is really important.”

Cllr Moore added that the council “a history of challenges” with the roll-out of new technology used by Capita, pointing to an

earlier problem with the adult social care IT system


The concerns were echoed by Conservative member for Hale Cllr Laith Jajeh.

He said: “I am a school governor at the Fairway School. This is something that, when you hear about it, it is almost unbelievable.

“What I am looking for today is any assurance whatsoever from Capita or council officers that those who are most vulnerable at this moment in time – which, as far as I am concerned, is my school – is getting the assurance it needs that this is being dealt with.”

Councillors called for reassurance that proper testing of IT systems was being carried out and asked what the potential cost to the council could be.

Michael Green, public sector account director at Capita, said: “I am happy to report back on the lessons learned from the implementation, what testing procedures were done at the time, and what we have learned from that, in July.”

But Cllr Jajeh said the committee was almost “chasing its tail” continually seeking reassurances from Capita.

He said: “It would be nice if we knew that information before we came here – not at the next committee.”

Later in the meeting, a representative from the council’s external auditor, BDO, told the committee that Capita did not provide control reports as part of its contract with Barnet Council.

It comes after a report into a £2 million fraud suffered by the council highlighted significant weaknesses in the council’s financial controls.

Leigh Lloyd-Thomas, engagement lead at BDO, pointed out that outsourcers typically provide a control report that is checked by an independent auditor.

But he told the committee: “Capita are not minded to do that with you, so you are relying heavily on an internal audit.”

Labour councillors suggested control reports should have been provided as part of the council’s contract with Capita.

Cllr Moore said: “If that had been in place, do you believe we might have picked up some of the systemic problems that were highlighted ultimately as part of the fraud?”

Mr Lloyd-Thomas replied that it was “quite possible” that the problems would have been picked up.