BARNET Council has to find more than £10million to cover a claim against it by the care firm Catalyst after it carried out improvements to homes in the borough.
An arbitrator has ruled the council should pay out £8.67m to the firm, including interest and costs, of a claim of around £17m lodged by the firm in 2008.
Problems relate to Catalyst underestimating the cost of improving and developing new facilities for the council, in a contract signed under the Labour-Lib Dem coalition administration in 2002.
The firm had asked for around £17m to help cover the costs, but the council decided to go to arbitration to decide how much it would be eligible for.
However, this cost the council £2m in legal fees, and it now has to find a further £2.158m this year after setting aside more than £7m in its reserves in 2009/10.
The full extent of the costs have been set out in a paper to go before the cabinet resources committee on Wednesday.
In the report, officers detail how an arbitration hearing in November 2010 ruled Barnet should pay for all losses for the first six years of the contract, plus interest.
The officers had argued the council was not liable for the full costs and should only pay a simple interest rate on those they were liable for.
Officers are now working to re-negotiate the terms of the contract with Catalyst.
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