Barnet Council will bring IT services in-house at the end of this month after being forced into an eleventh-hour decision to abandon its plan to switch supplier.
The London council U-turned on its plan to move IT to another company after the tender winner upped its costs and a subsequent review found that moving services in-house would have financial and service benefits.
In July 2022, the London borough announced it was ending its multi-layered outsourcing contract with business services giant Capita, originally signed in 2013. This followed members of the council’s policy and resources committee voting in favour of ending the contract.
The 10-year deal included human resources (HR), finance, IT and estates, as well as customer services and revenues and benefits. The arrangement was originally known as the One Barnet programme and was seen as a flagship for councils in the future.
But there were concerns over the quality of delivery of the contract over the years, with a 2018 report recommending that HR and finance services, then provided by Capita, should be brought back in-house.
Part of the plan to transition back to in-house services involved extending some contracts with Capita, including IT. The extended deal to deliver back-office services such as HR and finance, as well as deliver IT, was worth up to £57m.
The IT services element of the contract was set to move to another supplier on 1 October, but it will now move in-house by the end of this month (30 September) after that deal was cancelled.
Ultima Business Solutions was set to take over the contract, which was worth up to £10m, but the council decided to bring it in-house, stating that the bidder increased the cost.
Council meeting notes from earlier this month revealed that, “The council’s preferred bidder sought to substantially increase its submitted bid costs post submission and evaluation,” adding: “The preferred bidder was given the opportunity to either stand by its originally submitted bid or to withdraw its bid by a deadline set by the council. The bidder did not do this, and its bid was subsequently rejected by the council.”
As a result, Barnet carried out a due diligence service requirement review against the business case and delivery options, which identified the financial and service benefits of insourcing. “The procurement was subsequently abandoned,” said the council.
Barry Rawlings, leader of the council, said this week: “We are committed to providing the very best services for our residents that offer value for money and are accountable to Barnet Council taxpayers.
“By returning our IT service in-house, it allows the council to retain ownership of its technology operations, priorities and decision-making, as well as provide clearer accountability and greater control over security decisions, and improved alignment on cyber security.”
In 2022, Rawlings said IT, customer services, and revenues and benefits were more complicated to bring back in-house straight away, and contacts were extended.
Capita continued to deliver IT services until this month. “We thank our partners at Capita and welcome the transfer of staff to the council’s in-house team,” added Rawlings.
