Outsourcing firm Capita looks set to be stripped of its contract to run Barnet Council’s pension fund following a string of problems with the scheme.

Town Hall finance chiefs have recommended ending the contract with the services giant and awarding it to Bradford City Council, which administers the West Yorkshire Pension Fund.

It comes after several high-profile problems with Barnet’s pension fund, which serves more than 27,000 current and former employees.

Pension fund administration was outsourced to Capita in 2013 under the Customer and Support Group contract – one of two major deals with the firm that were touted as saving Barnet taxpayers more than £165 million over ten years.

But it was not long before problems began to emerge. In 2017, Barnet Council became the first local authority to be fined by The Pensions Regulator after failing to submit the previous year’s scheme return on time.

Consultants Hymans Robertson flagged up more than 6,000 “critical” data errors in the scheme – including out-of-date salary information and incorrect contribution rates – in a report published in January last year.

The following July, The Pensions Regulator warned the council to make improvements in three main areas of pension administration or risk a financial penalty of up to £50,000.

A report subsequently published by the regulator detailed a “catalogue of errors” in the council’s pension fund, including £1.7 million of late contributions and a lack of clarity over its member data.

Earlier this year, council audit papers revealed a former senior pensions administrator at Capita had pleaded guilty to carrying out a £70,000 fraud against the fund while he was working for the company.

Although Capita has been working on a plan to fix problems affecting the pension scheme, it is still not complete.

Council finance chiefs say in a report to the policy and resources committee that “the best long-term solution for the service” is to move it to a local government pension scheme specialist provider.

Bringing the service in-house and managing it directly was deemed not to provide the best value for pension members, according to the report.

Councillors are expected to approve the plan to transfer pensions administration to the West Yorkshire Pension Fund when the committee meets on Wednesday (February 19).

Several other services will continue to be run by Capita under the Customer and Support Group contract, which is due to continue until 2023.

Council leader Cllr Dan Thomas (Conservative, Finchley Church End), said: “We aim to provide the very best service for the many dedicated employees who serve the people of Barnet.

“The scheme is in a stronger place now following recent improvements to the service. We want to build on this and have appointed West Yorkshire Pension Fund because of their particular expertise in running local government pension schemes.

“We thank Capita for their service and will be working with them to ensure the smooth and seamless transfer of our employee pension scheme to West Yorkshire Pension Fund.”

Labour lead on pensions Cllr Alison Moore (East Finchley) said the service should be brought in-house rather than transferred to another third-party provider.

She added: “It’s critical, for the sake of employees and pensioners, that this failing service is now sorted out and got back on track.

“Poor membership data was just the tip of the iceberg. Things have been going badly wrong for some time, but the Barnet Conservatives’ unswerving ideological commitment to their Capita outsourcing project blinded them to this.

“Labour colleagues and I will be scrutinising the choice of new provider very carefully to be sure that they really can deliver the change that’s needed and the quality of service we expect and scheme members deserve.”

Cllr Thomas replied: “Barnet Conservatives’ only unswerving commitment is to the residents of Barnet, and that is why we have made this decision.”

Capita has been approached for comment.