Capita Chief Calls Cuts Criminal


Outsourcing company Capita’s CEO tells the government to target IT and keeps its hands off frontline services

Cutting frontline services while the government wastes money in the back-office is criminal, according to the CEO of outsourcing titan Capita.

The Financial Times reports today that Paul Pindar said, as an example, his company could cut 30 percent of the police’s £2.5 billion HR and IT budget without even touching the front line.

“When you see local authorities closing libraries, swimming pools, it’s criminal,” he told them. “It’s a political agenda. Billions of pounds could be saved and the public wouldn’t notice the difference.”

In last year’s Comprehensive Spending Review the Chancellor George Osbourne targeted cuts of £6 billion in back office cuts across all Whitehall departments by 2014/15 .

And Capita, which already stores criminal records for the Home Office and collects the BBC’s licence fees, is bidding for a record £4.7 billion worth of contracts, reports the Financial Times.

Vested interest

Tony Collins of Campaign4Change says Pindar makes a valid point but suggests the answer may not lie with Capita.

He wrote on the Campign4Change blog: “It’s hard to argue with what he says. Except that the savings can be made by SMEs rather than the big suppliers, like Capita, that already dominate government IT spending.

“It may cost more for the civil service to handle SME contracts rather than manage a single large deal – but the savings may be greater through an imaginative use of IT and changes in working practices.”

The chairman of the Local Government Association’s improvement board, Peter Fleming, defended local authorities’ decisions to access frontline services, telling the Financial Times that councils had already saved £4.8 million a day outsourcing and sharing back-office functions.

As the government grapples with unprecedented national debts of £1.1 trillion, equivalent to 76.1 percent of GDP, the consolidation of government back-office functions and IT systems have high savings potential.

The Public Administration Select Committee (PASC) recently lamented the government’s “obscene” spending on IT projects that had earned fortunes for larger suppliers but provided little value.

In March, Cabinet minister Francis Maude unveiled a new ICT cost-cutting strategy renewing the government’s commitment to encouraging small business innovation and embracing open source technologies.

In the plans he promised to create a level playing field for open source software and impose compulsory open standards, starting with interoperability and security.

Meanwhile, earlier this month the Cabinet Office announced it was on target to close nearly 80 percent of its “vanity” websites.

Around the same time it also proposed a “cloud based Enterprise Resource Platform” for government departments to buy into and from, reviving the prospects of a government cloud or “G-cloud” strategy.

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