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Thursday, 5 September, 2002, 16:53 GMT 17:53 UK
Schools scandal hits Capita
Children walking to school
Capita has been accused of contributing to teacher check delays
You may never have heard of Capita, but chances are it runs some of your everyday services.

From collecting television licence fees to sending council tax bills, the group is winning an increasing number of public and private contracts.

It will help London Mayor Ken Livingstone enforce congestion charges from next spring and is part of a 250m project to redevelop Derby General Hospital.

But the company is in the headlines at the moment for its role at the government's Criminal Records Bureau (CRB) and the heavily delayed checks on those wishing to work with children.

This isn't the first time that Capita has faced criticism for its handling of a contract.

Series of hitches

The company's growth has not been without controversy.

It was awarded the contract to run Individual Learning Accounts (ILAs), the government adult skills policy which collapsed last year after fraudulent claims resulted in it going more than 60m over budget.

It has not been established how much Capita was to blame.

However, the group is now being accused of contributing to the disruption at the start of the school year, after checks on new staff were not ready on time for the new term.

Capita was contracted to provide the computer systems and infrastructure for the CRB which is making the checks, but 7000 staff have still not been vetted.

The group is gaining more critics over suggestions that it may receive compensation for the delays.

And some union members say that Capita should be awarded no more government contracts until a full investigation into the CRB fiasco has been completed.

The chairman himself has attracted controversy.

Rod Aldridge has consistently denied that he has donated any money to the Labour party or acted as an adviser on Public Private Partnerships.

But that has not prevented critics claiming his company is making money through the privatisation of an increasing number of services.

New Labour boost

Mr Aldridge founded Capita in 1987.

It has grown by taking on an increasing number of contracts, and staff, which were previously run by local authorities and government agencies.

The company estimates that it touches the lives of 33 million people in the UK and that 58% of its sales come from central or local government.

The government's latest Comprehensive Spending Review has worked in Capita's favour.

With increased projects for schools, hospitals and transport, Capita reckons it now operates in a market worth 65bn a year.

Even with its estimated 1.5% share of this market, it is clear to see the potential returns.

Profit at every turn

Capita divides itself into four key areas: Education, Local Government, Central Government and The Private Sector.

The group said in July that it had a pipeline of projects worth an estimated 1bn as its tentacles reach even farther afield.

Last month, the group moved into the pensions market after winning a 160m outsourcing deal by the UK division of American group Lincoln Financial.

The congestion charge scheme has been estimated as likely to make 280m over five years , while the BBC licence fee contract has been valued by analysts at 670m.

In the six months to June, profits at the group jumped 38% to 40.2m.

See also:

17 Apr 02 | Education
12 Jul 02 | Business
01 May 02 | Education
26 May 02 | Education
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