Capita Group

History

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The company was set up by CIPFA (the Chartered Institute of Public Finance and Accountancy) in 1984. In 1987 there was a management buy-out. Capita is now quoted on the Stock Exchange, although 12% of the shares are still owned by directors.

Capita formed a joint venture with British Telecom in 1988, called Telecom Capita. In 1990 Capita bought out British Telecoms share, and so now owns 99% of the business, which it renamed Capita Managed Services Ltd (CMSL) in December 1993.

OWNERSHIP:

On 23 February 1998 substantial shareholders were:
Janus Capital Corporation (10.0%)
National Westminster Group plc (5.1%)
Prudential Corporation (3.8%)
Standard Life Group (3.3%)

PRINCIPAL ACTIVITIES:
Capita has grown partly by gaining business, overwhelmingly through contracts in the public sector, and partly by acquisition. Among others, it has bought the following companies since 1989:

Penn Communications - public relations consultants - 1989
JE Greatorex - consulting engineers - 1990
RIPA - training and consultancy - 1992
Estate Management & Design - property services - 1992
West Wiltshire Software (from West Wiltshire District Council for £4m) - 1993
John Crilley & Son - debt collection - 1994
SIMS - schools management software - 1994
Beard Dove - property services - 1994
Estatecare (60%) - property services - 1996
Recruitment and Assessment Service - former civil service agency - 1996
DriveSafe Services Ltd - driving test administration - 1996/97
Imasys Revenues Collection Division - 1997
Hartshead Solway Ltd 1997
Datapay* (IBM) 1997
Tozer Gallagher Partnership (60%) 1997
DEC Services* (NatWest Bank) 1997
System House* - 1997
Estatecare (40%) 1997
Devon Information Technology Agency 1997
Bylander Waddell Associates 1997
David Preece 1997
Equitable Revenue Holdings 1997
Grosvenor Career Services - 1998
Tozer Gallagher Partnership (40%) - 1998

* Integrated with Capita Business Services Ltd.

In 1994 Academy Information Systems, a business providing software to local government was formed. The Imasys division acquired in 1997 was integrated with this business.

In 1995 Capita consolidated ownership in some parts of the group. It acquired all the shares of CMSL, Sims Holdings Ltd and Beard Dove Ltd. The John Crilley & Son business was merged with a 20% share of the business of Equitable Holdings plc (formerly Madagens plc). The share capital of Goldcrest Ltd and Action Press Ltd were repaid and the businesses transferred to other companies in the group.

In 1996 Capita bought 50% of DriveSafe, the government driving test agency, through a joint venture with JHP Group. In February 1997 Capita bought the 50% share held by JHP Group, to become the sole owner.

Also in February 1997, Capita bought Hartshead Solway Ltd, one of the largest UK pension administrators. Hartshead provides pension administration to 7 of the 10 water companies and the Environment Agency as well as major private sector clients. This is seen as a significant development for Capita in terms of the Teachers Pension Agency, for which Capita holds the administration contract.

DIRECTORS:

Members of the The Capita Group plc Board of Director and other positions held:
Rod Aldridge (Chairman and Ch Exec) - Previously MD of CIPFA Computer Services, which became the Capita Group.
Paul Pindar (Grp MD) - Previously with 3I, advised on Capitas MBO.
Derek Fowler (Non-exec Deputy Chairman) - non-exec director of Kier Group plc and of Papworth Hospital NHS Trust.
Robert Alcock (Non-exec Dir) - Ex Dir of Anglo-Overseas Trust
Gordon Hurst (Grp Commercial Dir) - previous with Sun Micro Systems
Paddy Doyle (Grp Dir Outsourcing) - previously with Hoskyns
Robert Benton (Group Business Development Dir) - with London Transport until 1984
Colin Welsh (Grp Dir Advisory Services) - Previously with Touche Ross and HM Treasury.

GROUP STRUCTURE:
The Capita Group has two operating divisions: Business Services (including management consultancy) and Property Services:

Capita Group
- Property Services
- Business Services
- Consultancy and Training
- IT Services
- Support Services
- Software Services

ACTIVITIES:

Capita gained a number of large prestige contracts towards the end of 1995 - nursery vouchers, driving tests, Yorkshire Water billing. In 1996 Capita got its largest ever contract in the form of the Teachers Pension Agency in Darlington and is acquired the Recruitment and Assessment Service (RAS) from the Government.

With key business centres:

HR Services
Basingstoke
Birmingham
Darlington
Lambeth
Sheffield
IT Services London
Kent
Yeovil
Customer Services Bromley
Cardiff
Coventry
Financial Services London
Shepton Mallet

In addition to its direct involvement in externalisations throughout the public sector, Capita has been heavily involved in advising public bodies in all most areas of service responsibility. As part of Business Services, Capita Consulting has an important strategic role to play in determining the future organisational structure and employment conditions of public bodies. Capita consulting operates in the areas of: Corporate strategy and organisation, Performance improvement, Finance and accounting, Information systems, Human resources, Competition (planning and management of externalisations), Policy Evaluation and research, and Quality management.

FINANCE:

CAPITA derives nearly 70% of its business services income from government contracts. (25 Feb 1998, COMPUTERGRAM Reuter Textline)

INDUSTRIAL RELATIONS:

Capita once had a firm resistance to recognising unions or consulting with them over redundancies. Since 1992 Capita has been keen to gain trade union support for their bids and so has gone out of its way to persuade public sector unions, in particular, that they are good employers, offering check-off and locally based jobs, but not collective bargaining. They have also agreed to take staff on as though transfer of undertakings regs applied. UNISON branches in Kent and Wiltshire have been particularly impressed.

In 1996 an agreement was signed with the civil service unions CPSA and PTC.

As they have acquired contracts, and in some cases lost them, Capita have transferred work from the original local authority locations to a small number of centres, and reduced overall staffing levels. In June 1993, when Capita failed to win an extension of their contract in Berkshire, the company transferred work to Kent, where Capita had won a contract six months earlier. Some staff who had only been transferred to Capita six months earlier were made redundant: one such worker had received a letter on 14th January 1993 which concluded "I am sure that the transfer to Capita will be of mutual benefit and offer the prospect of an interesting career ahead" - and then received another one on 14th June 1993 stating that " ... Capita finds itself in the position of having to make you redundant should we not be able to find you alternative employment by 30th September 1993. It is with much regret that the company finds it necessary to carry out a rationalisation program at this time...". All Capita staff received a letter on the same day, 14th June 1993, stating that "... there must be a reduction in the number of staff employed across the two sites".

By 1995 Capita were operating their IT and revenue contracts from four main sites - Cardiff, Mendip, Kent and Bromley.

In Oxford, employees in the Planning & Property Service, having seen Capita at work in the data centre, put Capita at the bottom of their list of possible contractors.

The PSPRU has details of Capitas standard conditions. These include:
Weekly hours: 37.5 hours
Holidays: 20 days, rising to 25 days after 5 years service
Pension scheme: employees contribute 6%, employers 5%: money purchase scheme.

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