CAPITA encyclopedia topics

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
2007	300	29,000	2,073	228.7

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 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 (NCCA). The company also manage the Education Maintenance Allowance for the Learning and Skills Council and the Criminal Records Bureau for the Home Office. 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.

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.

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.

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

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

Connections with the Labour Party

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 . Several MPs and journalists questioned Capita's relationship with the Labour party, alleging a special relationship that their performance did not justify.