How ‘Capita’ Became ‘Crapita’
by Michael Patrick O'Leary
This article appeared in Ceylon Today on March 15 2018
Rod Aldridge, or Sir Rodney Malcolm Aldridge OBE, FRSA, to give him his full title, worked in local government for ten years, employed by the Chartered Institute of Public Finance Accountants. For CIPFA, Aldridge ran a company specialising in helping local councils run their computers.
Aldridge bought the company and called it Capita. Since it was founded, as a two-man consultancy firm in 1984, Capita has grown to become the UK Government’s favoured company for outsourcing of public services. In 1987, it became an independent company with 33 staff and now has 36,000 workers based at more than 300 sites, predominantly in the UK and Ireland, and has also extended its operations to India. If the Sri Lankan Government has any plans to use Capita, read this article carefully and heed Mahinda Rajapaksa’s advice about privatisation and public private finance initiatives.
In March 2006, Aldridge resigned as Executive Chairman following allegations that contracts awarded to Capita were influenced by his loan of £1 million to the Labour Party. Aldridge is now reputedly worth £110m. He was replaced by his long-time associate Paul Pindar, who has complained about being called a ‘fat cat’. Pindar received a paltry £770,000 per annum salary and was reduced driving around in an Aston Martin DB9. The average Capita employee salary at the time was £28,000 per year.
Jack of All Trades
Capita’s influence spread malevolently throughout what used to be the public sector – health, education, prisons, health assessments for benefits, administration of benefit and pension payments. The House of Commons Work and Pensions Select Committee received nearly 4,000 submissions – the most ever by a select committee inquiry – after calling for evidence on the assessments for personal independence payment (PIP) and Employment and Support Allowance (ESA).
People with Down’s syndrome were asked by Capita representatives when they ‘caught’ it. A woman reporting frequent suicidal thoughts was asked why she had not yet killed herself. Relevant information was often omitted from, and fundamental errors included in, the medical assessment reports. One report said the subject was fit enough to walk her dog every day even though she did not have a dog. Civil servants had to be drafted in to help Capita out because waiting times were so long that in some cases people with terminal conditions died before receiving a penny. Atos and Capita were paid over £500m from tax payers’ money for assessing fitness to work but 61 per cent who appealed against failed claims won their appeals.
Capita has demonstrated similar incompetence and insensitivity in other areas in which it operates. Capita’s education arm sent a truancy notice to a pupil who had died two months before. While administering housing benefit for Lambeth Council, Capita wrote to a man telling him he no longer qualified for benefits because he was dead. Tens of thousands of unprocessed claims left many Lambeth families in danger of eviction.
In August 2016, a survey of General Practitioners found 85 per cent were missing records of recently registered patients, 65 per cent had experienced shortages of clinical supplies or delays in deliveries, and 32 per cent had suffered from missed or delayed payments.
In June 2014, it was reported that at least five of eight Liverpool National Health Service Trusts which had contracted their payroll and recruitment to Capita in 2012 were withdrawing because of concerns about the quality of the service provided.
The Great Training Robbery
Capita was guilty of maladministration in the Government’s £290m flagship training support scheme, the Individual Learning Accounts (ILA) which was implemented in 2000 and abruptly ended in 2001.Computer disks containing account holder names and PINs circulated on the black market. People were still being prosecuted for fraud as late as seven years after the ILA debacle.
On 31 January 2018, Capita announced a profit warning and dividend suspension as net debts were predicted to hit £1.15bn and a pension deficit to reach £381m. The announcement knocked 47 per cent off Capita’s shares, reducing its market value by over £1.1bn. In handing public service provision over to the robber barons, the Government sacked hundreds of thousands of civil servants. Brexit will close the door on foreign labour. Who will provide public services in the UK in the future?