Key Points
- In-House Transfer Confirmed: Barnet Council has officially decided to in-source its IT services by 30 September 2018, thus ending its long-term arrangement with Capita.
- Procurement Process Dropped: Plans to move IT services to the chosen bidder Ultima Business Solutions under a contract of maximum £10 million were dropped because the organization sought to raise its bid price after the evaluation process.
- Contract Background: The move concludes a number of years of unwinding the larger 10-year outsourcing contract which was signed with Capita in 2013 as part of the “One Barnet” program.
- Reasons for In-House Transfer: Due diligence analysis shows that in-sourcing the services will give more value for money and better cyber security fit.
Barnet (North London News) September 22, 2026 – Barnet Council will bring its IT services in-house at the end of this month after being forced into an eleventh-hour decision to abandon its original plan to switch to a new external supplier.
The London borough U-turned on its plan to move its core technology infrastructure to another company after the tender winner sought to raise its costs post-evaluation. A subsequent review conducted by the local authority concluded that returning services directly under council management would deliver clear financial and operational benefits.
This final transition follows the council’s July 2022 announcement that it was ending its multi-layered, 10-year outsourcing agreement with business services provider Capita, originally established in 2013.
Why did Barnet Council abandon its contract switch to Ultima Business Solutions?
As reported by Karl Flinders of Computer Weekly, the IT services element of the council’s operations was originally set to transfer to an external supplier on 1 October. However, these services will now fully return in-house by 30 September following the cancellation of the proposed procurement deal.
Ultima Business Solutions had been selected as the preferred bidder to take over the contract, which was valued at up to £10m. However, Barnet Council decided to abort the procurement process after the bidder raised its pricing structure late in the selection process.
Official council meeting notes revealed:
“The council’s preferred bidder sought to substantially increase its submitted bid costs post submission and evaluation.”
The document added:
“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.”
Following the rejection, Barnet Council executed a due diligence service requirement review to evaluate alternative options against its existing business case. The review identified significant financial savings and service enhancements associated with insourcing, leading the local authority to officially abandon external procurement altogether.
What did council leadership and stakeholders say regarding the insourcing decision?
Highlighting the rationale behind the structural shift, Barry Rawlings, Leader of Barnet Council, stated:
“We are committed to providing the very best services for our residents that offer value for money and are accountable to Barnet Council taxpayers.”
Rawlings added:
“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.”
Addressing the transition from the outgoing provider, Rawlings further noted:
“We thank our partners at Capita and welcome the transfer of staff to the council’s in-house team.”
Background to the development
The original 10-year agreement between Barnet Council and Capita, signed in 2013, was known as the “One Barnet” programme. It served as a high-profile flagship model for public sector outsourcing across the United Kingdom, encompassing human resources (HR), finance, IT, estates, customer services, as well as revenues and benefits.
Over the duration of the agreement, performance and operational delivery faced repeated scrutiny. A critical review in 2018 formally recommended that core functions such as HR and finance should be extracted from Capita’s oversight and brought back under direct municipal control.
In 2022, when council members voted to wind down the overarching outsourcing deal, Leader Barry Rawlings explained that certain services—specifically IT, customer services, and revenues and benefits—were too complex to bring back in-house immediately. Consequently, temporary contract extensions were granted, with the back-office and IT extension package valued at up to £57m to ensure continuity while long-term arrangements were finalized.
Capita continued managing the council’s IT operations throughout this interim period up until the final transfer this month.
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Prediction: How will this development affect Barnet Council taxpayers and municipal staff?
The final insourcing of Barnet Council’s IT operations is expected to impact local taxpayers, council employees, and overall service administration in several ways:
- Greater Financial Oversight for Taxpayers: By eliminating middleman margins and avoiding post-tender cost increases from external contractors, the council stabilizes its operational technology costs. Taxpayers are less vulnerable to contract variations and escalating vendor fees during periods of inflation.
- Direct Staff Ownership and Job Security: Affected IT personnel transferring from Capita directly into the council’s in-house structure gain formal public-sector employment status. This consolidation streamlines team management and removes the uncertainty associated with re-tendering cycles every few years.
- Enhanced Data Protection and Cyber Security: Maintaining direct ownership over the technology stack enables the local authority to react more rapidly to digital threats and municipal cyber vulnerabilities without needing to negotiate change requests or contractual additions through a third party.
