A legal challenge against Barnet Council's “unprecedented” outsourcing plans has failed at the appeal stage.

The authority will now go ahead with its One Barnet scheme – under which almost £700million worth of public service contracts will be sold off to the private sector in a bid to save cash.

Disability rights campaigner Maria Nash launched a judicial review against the move in March, and appealed when the judge ruled her claim was brought out of time.

The challenge forced the council to postpone a £320million contract with business processes firm Capita, which had successfully bid to run the council’s back office services.

But today, following a hearing at the Court of Appeal in July, judges upheld the decision by Lord Justice Nicholas Underhill in favour of the council.

Opponents of the One Barnet scheme accuse the authority of “gambling” with taxpayers’ money by committing to ten-year contracts with private sector firms.

Barnet Council has already agreed to sell off two major contracts to Capita, which it claims will make combined savings of £164million over the next ten years.

Services being sold off include environmental health and trading standards as well as a number of back office functions.

Barnet Council leader Richard Cornelius claims there is no alternative to the programme if the authority is to cut its budget deficit by a further £56million by 2015.

Commenting on today’s decision, he said: “I’m delighted. We can all now get on with making the huge savings in our back office costs which we need to do if we are to continue protecting our frontline services.

“Nobody has stepped forward to propose either cuts in services or increased taxes as an alternative to this programme.

“This (back office services) contract with Capita will save the Barnet taxpayer £126 million over the next decade. We have to be clear that we are in line for a decade of austerity and we have to look at all opportunities to drive down costs while supporting our services.”