Monday 17 December 2012

Bah, humbug: It's Crapita Christmas Week in Broken Barnet

Yes: in the wake of the decision by our Tory councillors to declare Barnet an open city for the marauding hordes of Crapita, the Scrooge like Barnet blogosphere has decided to cancel all festive celebrations, and make you all suffer instead with a week of horrible blogposts all about our new corporate masters. So.

Q:Who is Capita? What is Capita? What does Capita do?

A: It is the UK's biggest provider of BPO: business process outsourcing - back office, front office, private sector -and public sector, the market leader in strategic partnerships with UK local authorities. As well as maintaining huge involvement in private financial and investment companies, Capita has made itself indispensible to every form of public sector initiative, from local authority service provision, to the emergency services, education, the justice system, major infrastructure and regeneration projects, and healthcare.

Capita employs 46,500 people, in more than 350 sites - 68 of them not in the UK but in what they describe coyly as 'specialist business centres' across Europe, and India. Ah. Offshore call centres and related services account for more than 20% of their work locations. That must keep the wage bill down nicely.

And profits from such wise management are very healthy, it seems: turnover for 2011 was £2.9 billion, and profits before tax amounted to £385 million. Half year results for the first six months of 2012 were up between ten to fifteen per cent compared to the previous half year figures. Look at me: Mrs Angry, auditor to Crapita, plc. Eat your heart out, Mr Paul Hughes, of Grant Thornton. Yep: let me just sign the accounts off ... no need to look at any of the details, fine, fine, fine: any objections? Really? That'll be £34,000 just for asking. Time is money. Next.

Let's see. The company website has a helpful document with facts and statistics about the many, many services it currently delivers. It takes five pages to list them all, categorised under the following headings:

Customer Management
Life and Pensions 
General Insurance 
IT services 
Secure Information Solutions 
Software Services 
Revenues & Benefits 
Payment Management 
Software for schools and childrens services 
Investor & banking services 
Health solutions 
Property & Infrastructure consultancy 
Business travel 
TV licensing

There are some mind boggling statistics in this document: in 2011, for example, Capita supplied ICT products and services to 52 of the 53 police forces in the UK. The company's software services were delivered in partnership with over 70% of all local authorities. Capita was the fourth largest architectural practice, the main supplier of finance systems to the NHS, supported the IT needs of 20% of all schools in the UK. 

In other words: Capita does everything, is everywhere, feeds off every part of our public services and yet ... the beast is still hungry for more, its appetite undiminished by an ever increasing diet of market opportunity. Where can it go now? It needs new markets, new opportunities - and these are getting harder and harder to find, in this time of austerity measures and savage cuts in budget.

After a few years of what has been described as a 'frenzy' of public sector outsourcing, and in particular an enthusiasm for large scale partnerships with local authorities, there is now, in the wake of a shift in government policy, a rejection of such large scale programmes, in favour of a more mixed approach, using a variety of in house, voluntary and less over ambitious private sector providers. A more pragmatic solution, with risk spread over a range of suppliers. 

Oh: except of course here in Broken Barnet, we are years behind everyone else's thinking, and our Tory councillors are too stupid and lazy to inform themselves of the current political preference for public service provision, finding it easier to listen to the smooth assurances and empty promises of senior officers and private sector consultants, preparing the way for the introduction of a determined seduction by the big outsourcing companies like Capita, and BT.

Our Tory councillors have tried to convince us that the deal with Capita is a marvellous idea, of course. They know this because - well they don't know this at all, because they have not read the contract, or the necessary reports so as to inform themselves of the detail but they assure us that their senior management team and consultants have done all this tedious research for them. There is no need of any independent risk assessment, and everything will be just fine.

Our Tory councillors are very trusting. They also have short memories. Mrs Angry remembers, even as they seem to have forgotten, that not so long ago, this council lost many millions of pounds of tax payers money in the Icelandic bank crash. At the time, the leader of the council was Mr Mike Freer, now Mrs Angry's local MP. Mr Mike Freer said the Icelandic investment fiasco was nothing to do with him, and a senior officer got the blame. 

Mr Mike Freer was also the only true begetter of easycouncil, which became Futureshape, which became One Barnet. 

And here is a funny thing, citizens, and isn't the world a small place? 

Yes: just fancy that: according too this local Times group story from 2009, the financial advisers to Barnet Council at the time of the Icelandic investment were two companies: Butlers, run by former Conservative Party treasurer Michael Spencer ... oh, and also a company known as 'Sector Treasury Services ltd' or STS - which is owned by ... Capita. According to this report:

"A council spokeswoman confirmed Mr Towey failed to cross-check the deposits against credit criteria approved by the council’s financial advisors, Sector Treasury Services Ltd and Butlers Ltd, as outlined in Barnet's treasury management strategy."

Ah: all his fault then. Although quite a few critics may have wanted to put the blame elsewhere: see here

One thing is clear: when the One Barnet outsourcing deals go sour, as they will, it will be the senior officers, once again who carry the can: if any of them are still here. Capita will fight any challenge based on alleged failures in contractual obligations, and you and I, the residents and taxpayers of Broken Barnet, will be the ones who pick up the bill.

In truth, Capita now exerts a hugely powerful influence in the provision of public sector services - and might be argued to represent a virtual monopoly in some areas of the market.

Certainly in partnership with its few leading competitors, the market is pretty well set up in their favour, supplying custom to a strictly limited number of giant companies living off the profits to be found in your child's school, or your local hospital, or your council's services. 

Is this healthy? Does it ensure best value for money for taxpayers? Or is there not a rapidly increasing risk of conflict of interest when so many different functions are delivered by the same company, and so many links are formed between the company and the public sector markets where it operates?

Crapita Week, in Broken Barnet: more to follow on all the blogs this week.


Anonymous said...

explains the corporate claws.

Anonymous said...

Crapita are by far the worst employer I have ever worked for. They are money grabbing gits, who treat their staff like battery hens :-(