Cabinet at Barnet approves £320m outsourcing contract but threat of JR looms

The Cabinet at the London Borough of Barnet last night approved the appointment of Capita as preferred bidder for a controversial £320m, ten-year contract.

However, the local authority has been sent a pre-action protocol letter from one resident threatening judicial review on a range of grounds.

The New Support and Customer Services Organisation (NSCSO) project will cover a range of services, including estates, human resources, IT infrastructure and support, corporate procurement, revenues and benefits, finance and payroll, and customer and support services.

A report to the Cabinet claimed that the NSCSO project and Capita’s final tender would make a significant contribution to the council’s corporate priorities.

It argued that the deal would lead to better services with less money, “through contracting for guaranteed standards and levels across all NSCSO services, whilst at the same time reducing the operating cost of these services by at least 45% in real terms over the period of the partnership, saving the council £125.4m in the period 2013 to 2024”.

The report also said the deal – part of the council’s One Barnet initiative – would enable Barnet to meet the requirements of the current Medium Term Financial Strategy and the forthcoming additional savings anticipated as part of the next spending round.

“This money would otherwise have needed to be found from frontline service budgets,” it added.

The report suggested as well that the model would improve the ability of customers to access and engage with the council and receive the support they need, and provide an enhanced insight function helping Barnet analyse the needs of the borough and its communities in more detail.

However, the NSCSO project is expected to lead to a significant number of job losses.

The pre-action protocol letter was sent by law firm Steel & Shamash on behalf of Maria Nash, a local resident. The grounds for the judicial review are:

  • Breach of the council's duty to consult Barnet residents, businesses and community organisations about its plans;
  • Breach of councillors' duty to the residents in their area, “to make sure that their decisions represent the best available value for public money”;
  • Breach of the public sector equality duty: “The ‘equalities impact assessment’ done in the One Barnet case was a pure paper exercise, which took no account of the views of people who would be affected by the changes”;
  • Breach of public procurement law: This "requires that this contract be awarded to the company submitting the 'most economically advantageous tender from the point of view fo the public body'.... Lack of consultation with local people, lack of consideration of equalities and lack of in-house services comparator means the council cannot state that Capita gives the best value for money"; and
  • Breach of councillors’ duty to make up their own minds.

Nash has been backed by the Barnet Alliance for Public Services, a coalition of residents, trade unionists and community campaigners in the London Borough of Barnet, "formed to defend and improve public services”.

Barnet is expected in due course to outsource a second ten-year contract, this time covering development and regulatory services and estimated to be worth £275m. Capita Symonds and ECH Harris are in the running to take this on.

Law firm Trowers & Hamlins is advising Barnet on the NSCSO project.