Capita Group

The Capita Group Plc

Type	Public limited company
Traded as	LSE: CPI
Industry	Business process outsourcing
Founded	1984
Headquarters	London, United Kingdom
Key people	Martin Bolland (Chairman) Paul Pindar (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/near shore solutions
Revenue	£2,744.0 million (2010)[1]
Operating income	£395.1 million (2010)[1]
Net income	£235.0 million (2010)[1]
Employees	35,400 (2010)
Website	capita.co.uk

The Capita Group Plc (LSE: CPI), commonly known as Capita Group or Capita, is a business process outsourcing and recruitment company headquartered in London, United Kingdom. It is the largest business process outsourcing 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.^[2] It also has a property and infrastructure consultancy division which is the fourth largest multidisciplinary consultancy in the UK.^[3] Roughly half of its turnover comes from the private sector and half from the public sector.^[2]

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

History

Capita was formed in 1984 as a division of CIPFA (Chartered Institute of Public Finance and Accountancy). It became an independent company with 33 staff as a result of a management buy-out in 1987, led by Rod Aldridge, and was first listed on the London Stock Exchange in 1991. Capita continued to grow year on year.

In March 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 small company in 1987 to a FTSE 100 member in 2006.^[4]

In February 2007, a Capita office in Victoria, London was subject to a letter bomb attack. One person was injured.^[5]

On 2 October 2009, one of Capita's businesses (Capita Financial Group) announced plans to move some of its operations from London to Leeds.^[6][7][8]

On 1 July 2011 Capita acquired Ventura, a customer contact specialist for a cash consideration of £65 million.^[9]

Operations

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 a television licence fee contract won from the Post Office for the BBC; management of call centres for many government initiatives such as the London congestion charge (although this has recently transferred to IBM); 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 (NCCA).

Capita manage 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 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.^[10]

Capita Financial Administrators (CFA), was recently fined £300,000 for having poor anti-fraud controls by the Financial Services Authority.^[11]

Capita also provide outsourced HR and Recruitment services for the BBC, though heavily criticised for transferring 260 jobs from London to Belfast.^[12] The contract came into effect on 1 April 2006.

Capita entered the healthcare recruitment market during May 2011^[13] through acquisition of Team24 a healthcare recruitment specialist - extending the services they offer within the recruitment industry.

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 (thirty six million, seven hundred thousand pounds) by way of investment loans into Optima.^[14] 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.^[15] 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.^[16] 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^[17] and Adrian Lamb, former CEO of Optima Legal Services Limited, left the business in June 2010.^[18]

Property, Engineering & infrastructure services are provided under the Capita Symonds brand.

Education services

• SIMS.net – Schools Information Management Software a Management information system used in 95% of primary and secondary schools across the country to record many aspects of student data.^[19] In March 2009, Capita SIMS was said to be responsible for sending a truancy warning notice to the family of a Cheshire school student who had died two months before.^[20] SIMS also links with Capita One (through a process called B2B), which is a database used within Local Education Authorities for general analysis and overview of pupil and school data.^[21]

• Individual Learning Account – A £290million scheme intended to give financial support to adult learners that was opened in 2000 and scrapped in 2001 following widespread and massive fraud.^[22]

• Connexions Card – A £109million scheme that involved issuing 16 to 19 year olds with smart cards that recorded their lesson attendance and rewarded them with discounts on consumer goods. It ran from 2002 until it was terminated in 2006 owing to lack of uptake.^[23]

• Education Maintenance Allowance for the Learning and Skills Council^[24]

Financial performance

The Company's results are as follows:

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
2007	300	29,000	2,073	228.7
2008	300	32,600	2,441	226.6
2009	300	34,600	2,687	258.1
2010	300	35,400	2,744	309.8

Senior management

Paul Pindar joined Capita in 1987, he has been chief executive since 1999. For this role he is paid £375,000 salary and £525,000 bonus, giving a total annual compensation of £900,000.^[25]

Criticism

Capita Group has not always been received well by the public and in the media. It has gained the alternative nickname, Crapita, particularly from the coverage in the satirical magazine, Private Eye, of its many failures and setbacks in the public sector.^[26] 'Crapita' is a play on the slang word, crap, which means faeces. Despite this potentially adverse publicity, Capita's chief executive Paul Pindar was quoted as saying "Private Eye has to make a living. Actually, I think Crapita’s quite funny".^[27]

Pindar himself has attracted criticism for complaining about being called a 'fat cat', despite 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.^[27]

References

1. ^ ^{a b c} "Microsoft Word - Final Prelimstatement 2010 Final.doc" (PDF). http://www.capita.co.uk///Documents/Final%20Prelimstatement%202010.pdf. Retrieved 18 April 2011. 
2. ^ ^{a b} "The Capita Group Plc Annual Report and Accounts 2009". The Capita Group Plc. http://www.capita.co.uk/investors/Documents/Capita_AR_2009.pdf. Retrieved 30 August 2010. 
3. ^ "Capita facts and stats – year end 2009". The Capita Group Plc. http://www.capita.co.uk/investors/Documents/FactsStats2009.pdf. Retrieved 30 August 2010. 
4. ^ "Capita boss quits over Blair loan". BBC News. 23 March 2006. http://news.bbc.co.uk/1/hi/uk_politics/4836024.stm. Retrieved 12 February 2007. 
5. ^ Woman hurt in letter bomb blast BBC News, February 2007
6. ^ Jobs boost as Capita looks North Yorkshire Post, 2 October 2009
7. ^ Capita Financial's London staff placed in consultation process FT Advisor, 30 September 2009
8. ^ FTSE 100 financial group in Yorkshire move The Business Desk, 2 October 2009
9. ^ Contracts/Deals: Capita buys Ventura Recruiter, 1 July 2011
10. ^ "History of checks U-turns". BBC News website. 4 September 2002. http://news.bbc.co.uk/1/hi/education/2237173.stm. Retrieved 12 February 2007. 
11. ^ Capita Financial fined for Fraud accessed 26/05/06)
12. ^ "Unions threaten strikes over BBC's HR outsourcing deal". Personnel Today website. http://www.personneltoday.com/Articles/2006/02/21/34048/unions-threaten-strikes-over-bbcs-hr-outsourcing-deal.html. Retrieved 12 February 2007. 
13. ^ "Capita Group Purchase Team24 and Enter Healthcare Recruitment Industry". Team24 website. 31 May 2011. http://www.team24.co.uk/team24-news-2011-05-31-capita-acquires-team24.asp. Retrieved 01 July 2011. 
14. ^ "Capita: Annual Report 2009". Capitareport2009.co.uk. http://www.capitareport2009.co.uk/accounts/consolidated_accounts/note_17.aspx. Retrieved 18 April 2011. 
15. ^ Dowell, Katy. "Neuberger MR calls for regulatory reform as ABS timeline is unveiled". Thelawyer.com. http://www.thelawyer.com/neuberger-mr-calls-for-regulatory-reform-as-abs-timeline-is-unveiled/1003565.article. Retrieved 18 April 2011. 
16. ^ Dowell, Katy (9 August 2010). "Optima reprimanded by the SRA over Capita investment". Thelawyer.com. http://www.thelawyer.com/optima-reprimanded-by-the-sra-over-capita-investment/1005255.article. Retrieved 18 April 2011. 
17. ^ "Solicitors Regulatory Authority". Sra.org.uk. http://www.sra.org.uk/consumers/solicitor-check/155841.article. Retrieved 18 April 2011. 
18. ^ "SEO Adrian Lamb leaves Optima – 8th June 2010". Todaysconveyancer.co.uk. http://www.todaysconveyancer.co.uk/news.php?viewStory=87. Retrieved 18 April 2011. 
19. ^ Supplier feels the hand of Becta Guardian, 4 October 2005
20. ^ Dead girl given truancy warning BBC News website, 25 March 2009
21. ^ "Capita One and SIMS overview". Capita-cs.co.uk. http://www.capita-cs.co.uk/LocalAuthority/SIMSandOneOverview/Pages/Default.aspx. Retrieved 18 April 2011. 
22. ^ Schools scandal hits Capita accessed 26/05/06
23. ^ "Evaluation of Connexions Card". Dcsf.gov.uk. 20 December 1932. http://www.dcsf.gov.uk/research/data/uploadfiles/RR515.pdf. Retrieved 18 April 2011. 
24. ^ Liberata axed from school grant contract IT Pro, 19 November 2008
25. ^ "Paul Pindar: Executive Profile & Biography". BusinessWeek. McGraw-Hill. http://investing.businessweek.com/research/stocks/people/person.asp?personId=2989726&ric=CPI.L. Retrieved 2 September 2009. 
26. ^ Simon Bowers Capita deals with £3.3bn of government spending as more work is outsourced, The Guardian, 19 November 2010. Retrieved 2011-11-17.
27. ^ ^{a b} 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.

External links

• Official website
• Capita Group companies grouped at OpenCorporates

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