Capita

Capita plc
Public limited company
Traded as LSE: CPI
Industry Business process outsourcing
Professional services
Founded 1984
Headquarters London, England
Key people
 Martin Bolland (Chairman)
Andy Parker (Chief Executive)
Products BPO & service transformation
Back office administration
Customer service
Finance & treasury
Claims & policy administration
HR, staff support & training
ICT & software
Corporate services
Advisory services
Property & infrastructure
Offshore outsourcing
Revenue £4,674.3 million (2015)[1]
£639.0 million (2015)[1]
£55.6 million (2015)[1]
Number of employees
 75,000 (2015)[2]
Website www.capita.co.uk

Capita plc (LSE: CPI), commonly known as Capita, is an international business process outsourcing and professional services company headquartered in London. It is the largest business process outsourcing and professional services company in the UK, with an overall market share of 27% in 2009, and has clients in central government, local government and the private sector.[3] It also has a property and infrastructure consultancy division which is the fourth largest multidisciplinary consultancy in the UK.[4] Roughly half of its turnover comes from the private sector and half from the public sector.[3] Whilst UK-focused, Capita also has operations across Europe, Africa and Asia.

Capita is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.

History

Capita was formed 1984 as a division of the non-profit CIPFA (Chartered Institute of Public Finance and Accountancy). In 1987 it became an independent company with 33 staff as a result of a management buy-out, led by Rod Aldridge, and was first listed on the London Stock Exchange in 1991.[5]

In March 2006, Executive Chairman Rod Aldridge resigned in the aftermath of claims that contracts awarded to the Group were influenced by his loan of £1 million to the Labour Party. Aldridge resigned saying that he denied the claims, but to avoid any lingering doubts about it, he was leaving the company. Aldridge had overseen the company's growth from a small company in 1987 to a FTSE 100 member in 2006.[6] He was replaced by his longtime associate Paul Pindar.[7]

In February 2007, a Capita office in Victoria, London was subject to a letter bomb attack. One person was injured.[8]

On 2 October 2009, one of Capita's businesses (Capita Financial Group) announced plans to move some of its operations from London to Leeds.[9][10][11]

On 1 July 2011, Capita acquired Ventura, a customer contact specialist for a cash consideration of £65 million.[12]

On 28 February 2013, Capita bought the Fire Service College from the Department for Communities and Local Government for £10 million.[13]

In 2014 Pindar stepped down as chief executive.[14] He was replaced by Andy Parker.[15]

Operations

Capita works across eight markets - local government, central government, education, transport, health, life and pensions, insurance, and other private sector organisations (including financial services).

Examples of their activities include - a television licence fee contract for the BBC, won from the Post Office; provision of IT services, including web hosting and helpdesk support, to many county and city councils, many LEAs, the Driving Standards Agency and the National Rail (NCCA); full ownership of CHKS, a hospital accreditation scheme and healthcare informatics group;[16][17] ownership of a number of health clinics;[18][19] insurance[20] and occupational health services.[21]

In 1998, Capita won the contract to run Constructionline, the newly created Public-Private Partnership owned by the Department for Business, Innovation and Skills (BIS).[22]

Capita manages the Criminal Records Bureau for the Home Office. In 2002, when mandatory CRB-vetting of all workers with children was brought in, a large number of teachers were temporarily unable to work after Capita's systems had difficulty with the workload and were subsequently overwhelmed, meaning that the start of the academic year was delayed in some places. Poor systems specifications and last-minute changes in government policy by the then Secretary of State for Education, Estelle Morris are believed to have been significant factors in these delays.[23]

In 2006 Capita Financial Administrators (CFA) was fined £300,000 by the Financial Services Authority for having poor anti-fraud controls .[24]

Capita entered the healthcare recruitment market during May 2011[25] through acquisition of Team24, a healthcare recruitment specialist - extending the services they offer within the recruitment industry.[26]

Capita also intended to enter into the legal services market and entered into a funding arrangement with the Law Firm Optima Legal Services Limited which saw them, in the period between May 2006 to the end of 2009 invest a total of £36,700,000 by way of investment loans into Optima.[27] As part of the funding arrangement Capita Group had the option of acquiring the shares of Optima Legal Services for the nominal sum of £1 upon the full implementation of the Legal Services Act 2007 which would make ownership of law firms by the likes of Capita possible. It is thought that such Alternative Business Structures ("ABS") could be lawful around October 2011.[28] However, on 9 August 2010 it was reported that the Solicitors Regulatory Authority ("SRA") had found that the arrangement breached its rules in that it effectively amounted to an ABS.[29] As a consequence, Optima Legal Services Lead Litigation and Property Partners, Philip Robinson and Anthony Ruane respectively were both severely reprimanded by the SRA for what was found to be professional misconduct and only narrowly avoided referral to the Solicitors Disciplinary Tribunal[30] and Adrian Lamb, former CEO of Optima Legal Services Limited, left the business in June 2010.[31]

In January 2015, Capita acquired Constructionline outright from BIS for £35m.[32]

NHS Services

In June 2014 it was reported that at least five of eight Liverpool NHS Trusts who had contracted their payroll and recruitment to Capita in 2012 were withdrawing because of concerns about the quality of the service provided.[33] Several NHS trusts contracted with the company for human resources services. West London Mental Health NHS Trust cancelled their contract in September 2014 after the company proved "unable to meet acceptable ‘time to hire’ targets", particularly for nurses. At the same time Alder Hey Children's NHS Foundation Trust and Liverpool Heart and Chest Hospital NHS Foundation Trust terminated their contracts.[34]

In November Mersey Care Trust revealed that "information governance issues" had been uncovered when the services were taken back in house. Details of staff at other Merseyside trusts were sent to Liverpool Community Health Trust’s HR department.[35]

The company was awarded a 4-year contract to become sole provider of administrative services including payment administration, management of medical records, and eligibility lists for practitioners for GPs, opticians and dentists across the UK by NHS England in June 2015.[36] In July 2016 it was reported that there was “a large backlog of unprocessed correspondence relating to patients”. It was earlier reported that the company was unable to deal “effectively” with the movement of paper records between practices.[37]

In 2015, an undercover Daily Telegraph investigation showed that in some cases locum agencies, Medicare and Team24 owned by Capita were charging some hospitals higher fees than others and giving false company details. The agencies were charging up to 49% of the fee. Health secretary Jeremy Hunt criticised agencies who sought “big profits” at the expense of the NHS and taxpayers and promised to “reduce the margins rip-off agencies are able to generate.”[38]

The company took over Primary Care Services England service provision in September 2015. The new service was described as shambolic by the Local Optical Committee Support Unit and the Optical Confederation. [39]A deal was negotiated to enable optician practices to claim interest, administrative costs and bank charges on late payments of General Ophthalmic Services fees by Capita.[40] In August 2016 a survey of GPs found 85% were missing records of recently registered patients, 65% had experienced shortages of clinical supplies or delays in deliveries, and 32% had suffered from missed or delayed payments. Delays in the payment of GP trainees’ salaries were also reported.[41]

Education services

Irish Postcodes

In 2014, Capita were awarded the contract to introduce postcodes to the Republic of Ireland. The Irish communications minister has welcomed the implementation saying that the Irish code is the first in the world to be unique to each individual address. The scheme was launched in July 2015.[49]

The emergency services have expressed concern that the new system may lead to responders having difficulty getting to incidents.[50] Further, the Irish Data Protection Authority has raised concerns over the design of the code as information about individuals will be made more accessible.[51] Liam Duggan, CEO of Capita Ireland stated at a Government enquiry in 2014 that they had thoroughly tested the new system for unsuitable words and even used a game of Scrabble for this purpose.[52]

The project is generally running to programme and budget unlike many other Government information technology projects: roll out, which was originally planned to start in March 2015, will now take place in "mid-2015" and the cost, which was originally budgeted at €25 million has increased to €27 million.[53]

Partnerships

Groupcall

Groupcall are commercial and SQL technical partners with Capita.[54] They are official resellers of Groupcall's mobile app Emerge, which enables schools to access their school information management system data on Apple iOS or Android devices.[55]

Financial performance

The Company's results are as follows:[1]

YearPeopleTurnover (£ million)Pre-tax profit (£ million)
19842  
198733  
199132025 
199268733 
19963,50011212.3
19985,00023827.1
19997,00032736.3
20008,50045351.2
200113,00069172.1
200217,00089898.2
200319,0001,081121.2
200423,0001,282148.6
200524,0001,436177.2
200627,0001,738193.2
200729,0002,073228.7
200832,6002,441226.6
200934,6002,687258.1
201035,4002,744309.8
201146,5002,930302.9
201252,5003,352281.4
201365,0003,851215.0
201468,0004,372292.4
201575,0004,674112.1

Criticism

Capita Group has not been received well by the public and in the media. It has gained the nickname "Crapita", particularly from the coverage in the satirical and current affairs magazine Private Eye, which routinely documents the company's many failures and setbacks in the public sector.[56][57]

Pindar himself has attracted criticism for complaining about being called a 'fat cat', receiving a £770,000 per annum salary and driving around in an Aston Martin DB9. "It really takes the biscuit—especially when you consider his workers are fighting for a rise equivalent to just four pints of milk a week", said a workers' representative. The average Capita employee salary at the time was £28,000 per year.[57]

It was revealed in January 2013 that Capita was embroiled in a scandal over misinforming people that they had to leave the U.K. as they had no valid visa. One such person was in fact the holder of a U.K. passport.[58]

In 2014, a leak to The Guardian revealed that the DWP had to send civil servants in to help the company process personal independence payments for the seriously ill and the disabled. "Waiting times for assessment," the newspaper noted, "have been so long that in some cases people with terminal conditions have died before receiving a penny."[59]

The 2015 sale of a government research operation charged with overlooking food safety to Capita has been criticized by Tim Lang, an advisor to the U.K. government and the WHO on food safety issues.[60] Arguing that a for-profit operation will be under pressure to ignore low-paying projects vital to public safety and the environment, he indicates that there is no profit in public research concerning food and biodiversity or food and pesticide residues, and predicts "commercial concerns will skew Fera's priorities"[60]

References

  1. 1 2 3 4 "Preliminary Results 2015" (PDF). Capita. Retrieved 20 March 2016.
  2. ↑ "Who we are". capita.co.uk. Retrieved 15 March 2015.
  3. 1 2 "The Capita Group Plc Annual Report and Accounts 2009" (PDF). The Capita Group Plc. Archived from the original (PDF) on 24 September 2010. Retrieved 30 August 2010.
  4. ↑ "Capita facts and stats – year end 2009" (PDF). The Capita Group Plc. Archived from the original (PDF) on 24 September 2010. Retrieved 30 August 2010.
  5. ↑ "Capita". London Stock Exchange. Retrieved 20 March 2016.
  6. ↑ "Capita boss quits over Blair loan". BBC News. 23 March 2006. Retrieved 12 February 2007.
  7. ↑ Simon Bowers (November 18, 2010). "Capita deals with £3.3bn of government spending as more work is outsourced". The Guardian. Retrieved October 28, 2015.
  8. ↑ Woman hurt in letter bomb blast BBC News, February 2007
  9. ↑ Jobs boost as Capita looks North Yorkshire Post, 2 October 2009
  10. ↑ Capita Financial's London staff placed in consultation process FT Advisor, 30 September 2009
  11. ↑ FTSE 100 financial group in Yorkshire move The Business Desk, 2 October 2009
  12. ↑ Contracts/Deals: Capita buys Ventura Archived 3 July 2011 at the Wayback Machine. Recruiter, 1 July 2011
  13. ↑ UK Fire Service College sale completed to Capita BBC News, 28 February 2013
  14. ↑ "Paul Pindar: the man who took the "r" out of Capita". Daily Telegraph. Retrieved October 28, 2015.
  15. ↑ "CEO of bloated outsourcing firm Capita quits after 26 years". The Channel. 18 November 2013. Retrieved 28 October 2015.
  16. ↑ Capita acquires CHKS
  17. ↑ "CHKS - Insight for better healthcare". chks.co.uk. Retrieved 15 March 2015.
  18. ↑ Capita Health & Wellbeing
  19. ↑ "Services to the healthcare industry". capita.co.uk. Retrieved 15 March 2015.
  20. ↑ "Capita Insurance Services". capitainsuranceservices.co.uk. Retrieved 15 March 2015.
  21. ↑ Capita to acquire Aviva's occupational health business
  22. ↑ "CAPITA WINS CONTRACT TO RUN ONLINE CONSTRUCTION REGISTER". lgcplus.com. Retrieved 15 March 2015.
  23. ↑ "History of checks U-turns". BBC News website. 4 September 2002. Retrieved 12 February 2007.
  24. ↑ Capita Financial fined for Fraud accessed 26/05/06)
  25. ↑ "Capita Group Purchase Team24 and Enter Healthcare Recruitment Industry". Team24 website. 31 May 2011. Retrieved 1 July 2011.
  26. ↑ "Healthcare Jobs & Medical Careers From Recruitment Agency Team24". team24.co.uk. Retrieved 15 March 2015.
  27. ↑ "Capita: Annual Report 2009". Capitareport2009.co.uk. Archived from the original on 11 September 2011. Retrieved 18 April 2011.
  28. ↑ Dowell, Katy. "Neuberger MR calls for regulatory reform as ABS timeline is unveiled". Thelawyer.com. Retrieved 18 April 2011.
  29. ↑ Dowell, Katy (9 August 2010). "Optima reprimanded by the SRA over Capita investment". Thelawyer.com. Retrieved 18 April 2011.
  30. ↑ "Solicitors Regulatory Authority". Sra.org.uk. Archived from the original on 18 February 2011. Retrieved 18 April 2011.
  31. ↑ "SEO Adrian Lamb leaves Optima – 8th June 2010". Todaysconveyancer.co.uk. Retrieved 18 April 2011.
  32. ↑ "Capita announced as new owner of Constructionline". gov.uk. Retrieved 2 April 2015.
  33. ↑ "Trusts exodus from Capita HR contract". Health Service Journal. 18 June 2014. Retrieved 14 July 2014.
  34. ↑ "Three trusts end Capita HR contracts". Health Service Journal. 30 September 2014. Retrieved 24 October 2014.
  35. ↑ "HR firm reviews protocols after NHS staff data breach in Liverpool". Nursing Times. 9 February 2015. Retrieved 10 March 2015.
  36. ↑ "Capita is awarded NHS England admin contract worth up to £1bn". City AM. 23 June 2015. Retrieved 26 June 2015.
  37. ↑ "NHS England investigates primary care support service after 'serious incident'". Health Service Journal. 21 July 2016. Retrieved 28 July 2016.
  38. ↑ Lyndsey Telford; Claire Newell; Edward Malnick; Luke Heighton (22 Dec 2015). "NHS hit by locum agency nurses' pay scandal". Daily Telegraph. Retrieved 25 December 2015.
  39. ↑ "Optical leaders demand urgent Capita action". Optician. 3 August 2016. Retrieved 27 October 2016.
  40. ↑ "CAPITA LATE PAYMENT SAGA CONTINUES". Optometry Today. 14 July 2016. Retrieved 27 October 2016.
  41. ↑ Baines, Emma (1 December 2016). "Derailing the NHS". London Review of Books. Retrieved 1 December 2016.
  42. ↑ Supplier feels the hand of Becta Guardian, 4 October 2005
  43. ↑ Dead girl given truancy warning BBC News website, 25 March 2009
  44. ↑ "Capita One and SIMS overview". Capita-cs.co.uk. Archived from the original on 15 April 2011. Retrieved 18 April 2011.
  45. ↑ Schools scandal hits Capita accessed 26/05/06
  46. ↑ "Evaluation of Connexions Card" (PDF). Dcsf.gov.uk. 20 December 1932. Retrieved 18 April 2011.
  47. ↑ Liberata axed from school grant contract IT Pro, 19 November 2008
  48. ↑ "Capita Education Resourcing - Proud Supporters of National Supply Teacher Week 2014". The Supply Teacher. Retrieved 24 July 2014.
  49. ↑ "Eircode, Ireland's postcode system is launched". 13 July 2015. Retrieved 5 April 2016.
  50. ↑ "Claims that Eircode will 'confuse emergency services and cost lives' denied". The Journal. October 2014. Retrieved 26 November 2014.
  51. ↑ "The Data Protection Commissioner is very worried about the new postcode system. Here's why…". The Journal. May 2014. Retrieved 26 November 2014.
  52. ↑ "Your new postcode won't say 'F1CK' or 'IRA'. Here's why". The Journal. November 2014. Retrieved 26 November 2014.
  53. ↑ "New €27 million postcode system promises significant benefits". Offaly Independent. 19 November 2014. Retrieved 26 November 2014.
  54. ↑ "Groupcall SIMS Emerge". Capita SIMS. Archived from the original on 28 January 2012. Retrieved 23 August 2012.
  55. ↑ "Our history". capita.co.uk. Retrieved 15 March 2015.
  56. ↑ Simon Bowers Capita deals with £3.3bn of government spending as more work is outsourced, The Guardian, 19 November 2010. Retrieved 2011-11-17.
  57. 1 2 How dare you call me a fat cat, I only earn £14,500 a WEEK, Daily Mail Online, 15 December 2010. Retrieved 2011-11-17.
  58. ↑ BBC News - Migrants wrongly told to leave UK by firm hired by UKBA, BBC News, 3 January 2013. Retrieved 2013-01-03.
  59. ↑ "Civil servants deployed to help Capita clear PIP assessments backlog". The Guardian. 6 April 2014. Retrieved 7 April 2014.
  60. 1 2 Tom Bawden (March 25, 2015). "Capita and the great British food safety sell-off". The Independent. Retrieved October 28, 2015.
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