Outsourcing firm Capita has apologised after a pay glitch left 170 council staff out of pocket this week.

The council employees were paid less than they should have been after they were incorrectly auto-enrolled onto a pension scheme due to a technical glitch in Capita’s Human Resources (HR) system.

Mike Green, public sector account director at Capita, told Wednesday’s (May 1) audit committee that 170 people had been affected by the error, which led to extra deductions from their pay packets.

Cllr Alison Moore, Labour member for East Finchley, warned the mix-up could cause problems for people with direct debits set up to come out of their bank accounts after they have been paid.

She said: “If those affected have to deal with rent or other payments that come out, that is clearly an issue.

“I would hope there would be support for anyone who goes into arrears with their back account and that sort of thing – direct debits to banks, and council tax.”

Cllr Laithe Jajeh, Conservative member for Hale, asked how much pay had been docked from workers’ salaries.

A HR officer said: “I think the highest rate is 11 per cent of employee contributions. These were people on high wages.

“For the staff on lower wages, it is probably in the region of six per cent.”

The HR officer confirmed that the issues were not confined to one department but affected all parts of the council.

A Capita spokesperson said: “A technical error led to extra deductions being taken from a number of employees on Tuesday (April 30).

“This was flagged immediately, and refunds will be made today (Friday). We apologise to those affected.”

Councillors at the committee called for better testing of new IT systems by Capita and also raised concerns over the lack of a safeguarding mechanism in the council’s contracts with the firm.

The council outsourced a range of services to Capita in 2013 in a bid to save millions of pounds against a backdrop of swingeing funding cuts from central government.

But a string of problems – including a major fraud by a Capita employee – led the council to bring finance and strategic HR back under its control in April this year.

While that means the council now deals with top-level HR, much of the day-to-day HR is still handled by Capita at its centre in Carlisle.

Capita paid Barnet Council more than £4 million in compensation for contractual problems in a deal reached in November last year.

A Barnet Council spokesperson said: “We experienced a technical issue last week on the payroll system. This led to a number of staff having extra money deducted from their monthly salary on Tuesday.

“This matter was identified as part of the improved financial controls we now have in place and was immediately flagged by Capita to our HR department.

“We’re pleased to report the money was refunded today (Friday, 3 May) to those staff that were affected.  We apologise for any inconvenience this may have caused.

“Following the review undertaken by Grant Thornton last year, we implemented a number of financial control measures and we continue to assess these.

“The reviews undertaken by our own Internal Audit team also provide us with a greater understanding of the effectiveness of these controls, as well as other controls across the range of services provided by Capita.”