High Court to decide whether to pursue Barnet Council judicial review
Charlotte Jee Published 29 January 2013
Landmark case on consultation may have implications for other councils considering outsourcing
A senior judge is to preside over three days of legal argument at the Royal Courts of Justice from March 19 before deciding whether to approve a full judicial review into ‘One Barnet’, an umbrella term for various outsourcing projects running across Barnet Council.
As part of the application, the judge will examine Barnet Council’s decision to award a £320m contract to Capita, which would see Capita running Barnet’s new support and customer service organisation (NSCSO). The contract has a number of service areas within its scope, including the council’s call centre, IT infrastructure and support, corporate procurement, customer services and finance and payroll. According to the Council, the contract is expected to save £120m over its 10-year term.
The signing of the deal, which was originally due to take place in January 2013, will now be delayed until the outcome of the application for a judicial review is known in late March 2013.
Another contract, titled the ‘Development and Regulatory Services (DRS) project’, was originally expected to be awarded in early January and will see either Capita or EC Harris win a 10-year £275m contract to run the council’s transport and environmental health services.
Regarding the impact the legal proceedings will have on the two “live” contracts, a council spokesman said, “Considering the court date, we have to do what’s practical so we’re now looking at a start date for the NSCSO in May, subject to the court’s decision and timing.”
He added, “We’ve delayed the decision making process for the DRS contract until after the court makes a decision”.
If the judicial review does not go ahead, it is understood that a supplier for the DRS contract would be chosen in May and then, following an Alcatel period- a contractual breathing space of at least ten days – the contract would be implemented in June or July.
The application for a judicial review, which was submitted on behalf of 67 year old disabled resident Maria Nash, argues that neither contract is legal because the council failed to comply with statutory guidance which places an obligation on the local authority to fully consult all stakeholders, including residents, voluntary organisations and businesses.
The case is also based on claims that the council “unlawfully denied a legitimate expectation that the London Borough of Barnet would carry out consultations with its stakeholders”, “failed to discharge its public sector equality duty”, “failed to discharge its fiduciary duty”, and breached the council’s obligation “to award the NSCSO to the tenderer submitting the most economically advantageous tender.”
Speaking to Government Computing, Gerald Shamash of Steel & Shamash, the solicitor acting for the claimant Maria Nash, said, “The strongest point is that the council failed to consult. They will argue that they have- or don’t need to- but the truth is that this is such a big contract, and they just can’t have done.
“We’re going to have a pretty good run on this. We want to see the contract, who the council consulted, and what that consultation meant.
“They have to consult. If they haven’t, then they have to go back and do the job properly across the borough. Once they’ve done that, and if it’s a meaningful consultation, it may show that residents agree with the contract. If the people of Barnet want this we accept that, but it has to be done properly and it has to be meaningful.
“We haven’t done this just for the heck of it. Public money is being spent on this [legal case]. But the scale of it is so huge, and it is changing the democratic relationship between residents and who they vote for.
“If we were to win on the consultation point, that would change the landscape across the country…there have been other cases like this in Cornwall and Suffolk, but the point for us is that nothing has been done on this scale.”
Whatever the outcome, the case may have wider implications for local authorities considering outsourcing services to private sector providers to address cuts in central government spending.
Barnet Council is not the only local authority to run into controversy regarding large outsourcing contracts.
In December 2012 Cornwall Council voted to abandon a full ‘joint venture’ with BT, opting instead for only part of the initial plan to go ahead. In their original form, the proposals were responsible for months of political instability, with the deputy leader of the council resigning, the leader being ousted after losing a confidence vote, and one of the bidders for the contract pulling out.
Andrew Wallis, Independent Councillor at Cornwall Council, said, “I look forward to the outcome of this case, as it could have far reaching ramifications for any local authority in how it carries out its business. Either way, I feel any large-scale plan to outsource council services must have the full support of its residents. Without it, I believe it does not have the legitimate power to carry out this course of action.”