Outsourcing giant Capita has lost its contract to manage Barnet Council’s pension fund to a local authority in Yorkshire.

Councillors voted unanimously to award the contract to run Barnet’s pension scheme to Bradford City Council, which manages the West Yorkshire Pension Fund, at a meeting of the policy and resources committee on Wednesday (February 19).

Council finance chiefs say the transfer represents the “most cost-effective and best quality option for the Barnet pension fund”, which serves more than 27,000 current and former employees.

The decision follows a string of problems with the scheme – some of which have led to regulatory intervention – after it was outsourced to Capita in 2013.

These include more than 6,000 “critical” errors in member data, £1.7 million of late contributions and a failure to submit a scheme return on time.

Earlier this year, council audit papers revealed a former senior pensions administrator at Capita had pleaded guilty to carrying out a £70,000 fraud against the fund.

Although Capita has been working to fix problems with the scheme, a remediation plan agreed with the council remains unfinished.

A council report says the “best long-term solution for the service” is to move it to a “local government pension scheme specialist provider”.

As well as improving the quality of the service, the transfer to the West Yorkshire Pension Fund is expected to save the council £2,000 per year.

At Wednesday’s meeting, Labour lead on pensions Cllr Alison Moore (East Finchley) said the pension scheme should have been brought back in-house and run directly by Barnet Council “for reasons of control and oversight”.

But Cllr Gabriel Rozenberg (Liberal Democrat, Garden Suburb) said: “If it was run by the council, it would cost us more, it would be less efficient, and it is not obvious it would be, at the end of the day, an improvement.”

Council leader Cllr Dan Thomas (Conservative, Finchley Church End) claimed the opposition “lacked credibility” by saying “everything needs to be in-house”.

But Cllr Moore said the leader’s comments were “absolutely unreasonable”, as one of the problems with outsourcing to Capita – which ran pensions from its base in Darlington – was “distance and disconnect with what was happening with the provider”.

Pensions was one of several services outsourced from Barnet Council to Capita under the ten-year Customer and Support Group contract, which is due to run until 2023.

The council brought strategic HR and finance back under its control last year after admitting there had been “performance issues” with the contracts.