Mayor of London Sadiq Khan says Barnet took a "huge gamble" with taxpayers money when outsourcing services to Capita.

Mr Khan has criticised the authority for joining forces with the firm in 2013 as it has just reported a pre-tax loss of over £500million.

He said: “In privatising and outsourcing so many of Barnet Council’s key services to just one company – Capita – Conservative councillors have taken a huge gamble with local taxpayers’ money.

"This was always a reckless decision, but this week's announcement has further underlined just how irresponsible Tory members have been.

“By putting all their eggs in one basket they have exposed Barnet’s taxpayers to unnecessary and unacceptable levels of risk – and grossly mismanaged taxpayers’ money.”

In 2014 Barnet Council signed two separate contracts with Capita to help manage its support and customer service organisation (NSCSO) and it’s development and regulatory services (DRS).

The contracts were worth almost £500 million.

Under the NSCSO contract which started on September 1 2013 Capita agreed to deliver a range of services for the council including finance, HR and payroll.

Capita also agreed to manage services such as highways maintenance, planning and development and regeneration and environmental health under the DRS service.

London Labour said that Barnet Council’s approach to outsourcing services has been highly controversial and a major factor in the drastic reduction in the size of its workforce, from 3,200 to 322 employees.

Mr Khan added: “The Conservative councillors who signed these contracts should have given a great deal more thought to what would happen if Capita got into the kind of financial trouble it is now in.

“But instead, through their sheer incompetence and ideological drive to privatise and outsource services, they have potentially left local taxpayers and the council in a real mess.

“The local elections next week may be the last chance to turn around the Council’s fortunes and bring it back from the brink.

"I urge voters in Barnet to hold their local Conservative councillors to account for this fiasco and vote Labour on May 3.”

A Barnet Council spokesperson said: “The council regularly reviews the financial status of major suppliers as part of contract management and contingency planning arrangements.

"This week’s announcement from Capita is in line with the information provided to the market in January and does not therefore raise any new issues for the council.”