The Times Series reports that a former member of staff on a council contract with outsourcing firm Capita has been charged in a £2 million fraud case.

The former Barnet Council employee, on a Regional Enterprise contract with the outsourcer, appeared at Willesden Magistrates’ Court on Tuesday, July 3, to face two separate charges of fraud by abuse of position.

The Conservative Barnet council has become something of a “commissioning council”, which means outsourcing pretty much everything it can. Capita has already come under fire for ‘serious failings’ in pension management and has been fined by the council over accounting failures.

In May, the council was called on to take financial reporting back from Capita’s control after a report revealed a £9.5 million black hole had opened up in the local authority’s budget for the coming financial year.

The council’s policy and resources committee discussed the Capita contract review and considered a range of options for service delivery at a meeting on July 19. The review of the contract with the private provider could see seven services brought back under the council’s control after a report admitted there were areas of ‘persistent poor performance’ in the outsourcing model.

If it decides to go ahead with the review report’s recommendations, finance, strategic HR, management of the council’s land and property, highways, regeneration, strategic planning and cemeteries and crematoriums will be brought back in-house.

The council’s Labour group, which opposed the outsourcing plans before the contracts were signed, said it would support plans to bring them back in-house.

Labour Cllr Barry Rawlings said: “The Conservatives clearly decided not to admit the failure of their central ideology of mass-outsourcing during the local elections, which raises the question as to how honest they were with voters in the run-up to the local elections.

“Mass outsourcing was a gamble made by the Conservatives. It, and they, have failed the people of Barnet. It is time to take back control.”

Barnet Council claims the partnership with the company has led to significant financial savings, as well as efficiencies and improvements across a range of services.

The Regional Enterprise (Re) deal with Capita was signed in 2013 and covers a range of services, including environmental health, regeneration and highways.

A Barnet Council spokesperson said: “The council has recovered the money from Re as a result of this alleged fraud, and we took immediate action to increase financial controls and monitoring of the outsourced finance service.

“We have also commissioned an independent review of financial controls, the results of which will be presented to the Council’s Audit Committee on Tuesday, 17 July.”

The council have confirmed that the total value of money obtained fraudulently was over £2 million.

The case has been referred to Harrow Crown Court, where the next hearing will take place on Tuesday, July 31.

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