Millions wiped off value of Capita outsourcing deal with English councils amid 'further contract variation agreement'
- Reference: 1606131793
- News link: https://www.theregister.co.uk/2020/11/23/capita_oxfordshire_councils_deal/
- Source link:
[1]A tender document published recently confirms the outsourcing provider has had £14m removed from the deal with a shared-services group of Oxfordshire district councils, shrinking it to £126,528,796 (yes, count every last pound).
Having signed the initial nine-year £140.3m contract with Capita in 2016, South Oxfordshire District Council, Havant Borough Council, Vale of White Horse District Council, Mendip District Council, and Hart District Council have decided, we assume, that they've seen as much as they needed to.
"The Councils intend to enter into a further contract variation agreement with Capita for the purposes of removing the requirement for Procurement and the majority of the exchequer services and the reduction of the current IT service requirement from the scope of the original contract," the notice states.
This would result, the tender added, in "an immaterial reduction in contract value".
The councils [2]had already reduced the scope of the deal in March , cutting back the HR advisory hub, licensing services, human resources operational and payroll services, and finance services. As a result, 34 staff were moved back in-house along with the novation of a contract for Zellis payroll software.
Those inclined to snuffle out reasons for a bit of thanks-but-no-thanks to Capita could point to the fact that two-thirds of annual leave calculated for staff employed by South Oxfordshire and Vale of White Horse district councils was wrong, according to [3]local news reports last year .
Then again, t [4]the BBC reported in 2018 that the same two Oxfordshire councils were left disappointed after finding that expected savings of £18m in the shared services deal had not come to pass.
A report from Vale of White Horse District council admitted the financial benefit had been "considerably reduced" or even negated. Errors in pay, shortcomings in IT services, and difficulty getting in touch with Capita via its helpdesk were also mentioned in the report.
Not to worry, though. Both councils say the headline savings are just one benefit of the five authorities' partnership.
They aren't the only public-sector organisations struggling to recognise the immense value Capita brings to every contract. [5]Earlier this month , Three UK ended its business process outsourcing contract with Capita years ahead of schedule. Instead, the telco and ISP plans to bring certain functions in-house and offshore others to Tech Mahindra in India. Capita has now put 380 UK staff assigned to work on the Three contract at risk of redundancy. ®
Updated at 12:42 UTC on 23/11/20 to add:
A Capita spokesperson said: "We can confirm that we have agreed a proposal for the Exchequer Service to return to the 5 Councils Partnership in March next year. Additionally, there is a draft agreement to hand back the procurement service from 1 January 2021. "We look forward to continuing to work with the 5 Councils to deliver some of their essential public services."
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[1] https://ted.europa.eu/udl?uri=TED:NOTICE:560746-2020:TEXT:EN:HTML&src=0
[2] https://ted.europa.eu/udl?uri=TED:NOTICE:109745-2020:TEXT:EN:HTML&WT.mc_id=RSS-Feed&WT.rss_f=Defence+and+security&WT.rss_a=109745-2020&WT.rss_ev=a
[3] https://www.oxfordmail.co.uk/news/17796599.capita-work-vale-white-horse-south-oxfordshire-councils-leads-major-annual-leave-failures/
[4] https://www.bbc.co.uk/news/uk-england-oxfordshire-44711015
[5] https://www.theregister.com/2020/11/06/three_capita_call_center/
[6] https://whitepapers.theregister.com/
Re: I don't know
Those 380 are on the Three contract, so I'm afraid you can't blame the c[o*]un[t*]cillors for that particular number.
* delete as applicable
Re: I don't know
@KittenHuffer
You are absolutely right. I was wrong to use that number.
But I will stand by my overall sentiment that the councillors that decided to sign contracts with Capita were clueless. Otherwise why are they trying to change the terms now?
Cheers… Ishy
P.S. I am now writing very much tongue in cheek. But KittenHuffer? You have put a picture in my mind that I am trying hard to unsee.
Re: I don't know
" why are they trying to change the terms now?
The clue is probably in the phrase "NINE year contract". Technology marches on - Nobody should be paying top-dollar for services that seemed like good value 5 years ago, but today can be bought off the shelf for pennies. SLA's may also no longer make sense if the time & effort to carry out a task moves from significant to negligible.
Norfolk county Council went down this road back in 2004 - early termination of a 10-year contract with Capita. The adoption of Virtualization meant that paying a hefty chunk of cash for each separate server deployment no longer made sense.
- You want to start regular patching now? That'll cost you more.
- You want your servers deployed in LESS than a week now? That'll cost you more.
And on and on and on, until someone finally threw their hands in the air and decided that enough was enough and gave them the old heave-ho.
Re: I don't know
...or the self serving, self important councillors, whose only skill is maximising expenses claims.
Seat polishing with their shiny trousered arses, they are quite good at that too.
I'm in one of those 5 council areas mentioned in the story and as an upside I see this as a good thing considering that every year my council tax goes up and the scope of those services, or the actual service it does provides goes down, including some that you now have to actually pay for separately; so any additional cash in the bank should perhaps help with balancing the books (yes, I know... I can dream right?)
The downside is that my local council are well known for being very well self obsessed, opaque, open to persuasion by the highest bidder (especially in terms of land planning) and will do everything and anything to not have to either show their faces to, or actually be accountable or respond to the public they serve - unless they are forced to.
I guess payments and collections, helpdesk and all that sort of Backoffice stuff will now go to the even more cheapest bidder, and will reduce service further than they currently are under Crapita. Oh what a thing to look forward to...
expected savings of £18m in the shared services deal had not come to pass
They employed Capita and they thought they would save money? I suggest that next time they ask Santa Claus or the Easter Bunny to tender for contracts.
Re: expected savings of £18m in the shared services deal had not come to pass
At least either of those would deliver things on the specified dates, not months later
Interesting choice of words
Having read part way through that story I had to reach for a dictionary and just make sure of the definition of immaterial. 10 million is immaterial or am I reading this wrong ? Or do accountants use a different vocabulary to the rest of us.
Re: Interesting choice of words
Of course accountants use different vocabulary to us normal folk. If they used a language we could understand we'd find out just what a fucking mess they make of everything, and how bloody brilliant they are at hiding it.
Re: Interesting choice of words
Of course accountants use different vocabulary to us normal folk.
There is a story, possibly apocryphal, about a business that wanted to employ someone in a senior accountancy rôle. At interview each candidate was handed a sheet of figures and asked "what do these figures mean?"
The post was given to the applicant who responded "what would you like them to mean?"
Re: Interesting choice of words
"what would you like them to mean?"
Accountant? Or was it an auditor?
Re: Interesting choice of words
I did the same thing so... surely shome mishtake.
Oh... Beautiful!
From the article: They aren't the only public-sector organisations struggling to recognise the immense value Capita brings to every contract.
What a truly wonderful way of putting it.
An example of Litotes, IIRC.
What I don't understand is why Capita manages to hit headlines like this so frequently, and yet keeps winning contracts in the public sector.
You'd have thought that they would have been added to a blacklist a long time ago as being an excessively high risk supplier.
You'd have thought that they would have been added to a blacklist a long time ago as being an excessively high risk supplier.
Well, quite. However AIUI those seeking to place a contract with an external supplier of services are not allowed to take past performance into account. Now I know that most people who had discovered that a contractor they had used (builder, gardener, car servicing / repair and so on) was a complete cowboy would go out of their way to avoid that contractor like the plague* next time round but in the world of mirrors that is government it's not so much a case of "once bitten, twice shy" as "would you like to bite me again?"
* With apologies for using a cliché.
Local authorities have a pretty stringent tendering process that is intended to make everything fair and legal and above board, but in reality favours companies such as Capita who can invest considerable effort into ensuring their tender ticks ALL of the required boxes on paper, whilst still being complete bollocks.
I don't know
who are the biggest twats here.
Whether it be Capita management or the self serving, self important councillors, whose only skill is maximising expenses claims.
At the end of the day, there are now 380 employees worried to death that their lives may be about to be shattered thanks to the above mentioned bastards.
Cheer… Ishy