The Cabinet Member Decision Meeting of Barnet Council authorised the insourcing of IT End User and Managed Infrastructure services and the subsequent transition of staff from Capita Business Services Ltd. This decision was made after the Council's preferred bidder for a new IT contract attempted to renegotiate terms, leading to the abandonment of the procurement process.

IT End User and Managed Infrastructure Insourcing

The meeting authorised the Executive Director for Strategy and Innovation to take all necessary steps to bring IT End User and Managed Infrastructure services in-house from 1 October 2026. This decision also includes the implementation of TUPE (Transfer of Undertakings (Protection of Employment)) regulations and the transition of the entire workforce from the incumbent supplier, Capita Business Services Ltd, to the London Borough of Barnet.

The decision to insource followed the abandonment of a procurement process for a new IT contract. The Council had initially sought a new provider through a mini-competition under the Crown Commercial Service (CCS) Framework RM6190 Technology Services 4. However, the preferred bidder sought to significantly increase its bid costs after submission, which was not permissible under procurement rules. This led to the rejection of the bid and the subsequent decision to abandon the procurement.

During the discussion, Councillor Peter Zinkin, Leader of the Conservative Group, raised concerns about the reasons for the preferred bidder's request for additional funds, suggesting it indicated they perceived risks in the original contract price. He also questioned how the Council would mitigate risks related to single points of failure and innovation, as highlighted in the report.

Officers explained that the increased costs proposed by the bidder were primarily related to pension and redundancy costs, as they intended to make staff redundant on day one. The Council's own costing had already factored in these full costs, making the in-house option financially equivalent to the revised bid. It was clarified that making staff redundant on day one was not the Council's intention and would have been too risky, particularly concerning the loss of knowledge and resources.

The report noted that many of the risks associated with insourcing, such as potential costs and the complexity of the IT infrastructure, had diminished over time. The Council had completed its IT modernisation projects, migrating networks and data centres to the cloud. This has positioned the Council to manage IT services on a consumption-based model, working directly with specialist suppliers like Microsoft, rather than relying on a single managed service provider.

To manage the transition and the new operational model, the Council is bringing in IT procurement and contract management expertise. A risk mitigation plan, addressing potential single points of failure and access to wider development and innovation, is being developed and will be shared with the Cross-Party Member Reference Group. The report also highlighted that the Council is building strategic relationships with major suppliers like Microsoft, who are conducting a review of the Council's licensing and exploring innovation opportunities.

The decision was deemed urgent and therefore exempt from the standard call-in procedure, with agreement obtained from the Chair of the Overview & Scrutiny Committee. The report indicated that insourcing the service would allow the Council to retain ownership of its technology operations and decision-making, leading to clearer accountability and a more responsive approach to managing cyber risks. It was also noted that while some tender commitments related to social value might not be fully delivered, the in-house option would allow the Council to address workforce-related commitments directly and support wider sustainability and poverty reduction objectives.

The meeting concluded that insourcing the IT service was preferable to moving to another provider through the CCS framework, which might introduce similar issues, or extending the existing Capita contract, which would defer necessary service migrations. The transition is scheduled to take effect from 1 October 2026.