Information about Capita

Capita Group Plc
	Public (LSE: CPI)
Founded	1984
Headquarters	London
Key people	Eric Walters (Chairman) Paul Pindar (Chief Executive) Simon Pilling (Executive Director)
Industry	Business Process Outsourcing
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/near shore solutions
Revenue	£1,738.5 million GBP(2006)
Operating income	£225.1 million GBP (2006)
Net income	£139.7 million GBP (2006)
Employees	25,000 (2005)
Website	www.capita.co.uk

Capita (LSE: CPI) is a British company with its headquarters in London which specialises in business process outsourcing, having clients in central and local government, and in the private sector. In 2006 the company posted a profit before tax of £193.2m on a turnover of £1,738.5m. It has had a full listing on the London Stock Exchange since 1991 and has been a member of the FTSE 100 since 2004 when it replaced GKN^[1].

Capita works across eight markets, being local government, central government, education, transport, health, life and pensions, insurance, and other private sector organisations (including financial services). Examples include television licence fee a contract won from the Post Office for the BBC; management of call centres for many government initiatives such as the London congestion charge; and 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 (NCAA). Capita are also the developers of the SIMS schools information management software that is used in many primary and secondary schools across the country. With the impending change in the law that will allow commercial companies to offer legal services, Capita are now looking to get into this market with its formation of Optima Legal Services.

Despite continual claims of failures, Capita's share price has seen the biggest rise of any UK company in the last 17 years.

History and growth

Capita was formed in 1984 as a division of CIPFA (Chartered Institute of Public Finance and Accountancy), became an independent company with 33 staff as a result of a management buy-out three years later, and proceeded to return record results for 15 consecutive years. Having gained full listing on the London Stock Exchange in 1991, Capita is now a FTSE 100 company.

Year	Sites	People	Turnover (£ million)	Pre-tax profit (£ million)
1984	1	2
1987	1	33
1991	11	320	25
1992	15	687	33
1996	60	3,500	112	12.3
1998	80	5,000	238	27.1
1999	100	7,000	327	36.3
2000	120	8,500	453	51.2
2001	140	13,000	691	72.1
2002	200	17,000	898	98.2
2003	210	19,000	1,081	121.2
2004	230	23,000	1,282	148.6
2005	250	24,000	1,436	177.2
2006	250	27,000	1,738	193.2

Capita in the news

• One of the government facilities run by Capita is the Criminal Records Bureau; 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 places. Poor systems specifications and last-minute changes in government policy by the then Secretary of State for Education, Estelle Morris are believed to be major causes for these delays^[2].
  • Capita also ran the, now defunct, Independent Learning Accounts (ILAs) which were supposed to give financial support to adult learners. The ILA scheme was scrapped after it went £60 million over budget. (Schools Scandal Hits Capita, BBCOnline, 05/09/02, ^[3]
  • The call centre based in Coventry which deals with the London congestion charge was featured in a series on investigative reporting by the BBC .
  • Capita provide outsourced HR and Recruitment services for the BBC, though heavily criticised for transferring 260 jobs from London to Belfast^[4]. The contract came into effect on 1 April 2006.
    • On March 23 2006, Executive Chairman Rod Aldridge OBE 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 is a life-long Labour supporter, and had overseen the company's growth from a £100 million company in 1997 (when Labour came to power) to a £4 billion FTSE-100 member in 2006 ^[5]. Several MPs and journalists questioned Capita's relationship with the Labour party, alleging a special relationship that their performance did not justify.
    • In February 2007, a Capita office in Victoria, London was subject to a letter bomb attack. One person was injured.
    • And a subsidiary, Capita Financial Administrators (CFA), was recently fined £300,000 for having poor anti-fraud controls by the Financial Services Authority. ('Capita Financial fined for fraud', BBCOnline, 17/03/06, ^[6]
    • Capita is a frequent target of the satirical magazine Private Eye due to its alleged record of incompetence and impropriety. It is often referred to as "Crapita" and "the world's worst outsourcing firm". Former chairman Rod Aldridge has specifically come under scrutiny owing to the loan made to the Labour Party which ultimately led to his resignation.

    Some Capita contracts

    • Teachers' pensions
    • Abbey Insurance
    • London congestion charge
    • Connexions Card
    • DWP records storage and retrieval
    • National Rail (NCAA)
    • Education Maintenance Allowance
    • Criminal Records Bureau Disclosure system
    • TV Licensing
    • BBC Information
    • BBC People
    • National Strategy (Education)
    • Dixons Group (Dixons, Currys, PC World, The Link)
    • DTI Coal Health Contract
    • Lambeth, and Blackburn with Darwen Council Tax
    • Blackburn with Darwen, Westminster, and Rossendale Housing and Council Tax Benefits
    • Zurich Financial Services
    • Inverita (Voice Risk Analysis)
    • Prudential
    • eircom
    • MetLife
    • Bank of Ireland
    • St. James Place International
    • Resolution plc
    • Birmingham City Council
    • Cumbria County Council

    References

    1. ^ Capita set for return to FTSE 100. BBC News website. Retrieved on 2007-02-12.
    2. ^
  History of checks U-turns. BBC News website. Retrieved on 2007-02-12.
  3. ^ Schools scandal hits Capita accessed 26/05/06
  4. ^

Unions threaten strikes over BBC's HR outsourcing deal. Personnel Today website. Retrieved on 2007-02-12.
5. ^ Capita boss quits over Blair loan. Retrieved on 2007-02-12.
6. ^ Capita Financial fined for Fraud accessed 26/05/06)