Capita's win, capital's gamble

IT services group Capita has done rather well out of the public sector. The trend towards outsourcing some of the trickier parts of government provision has seen it grow its revenues and rise to the FTSE 100 in recent years. Yet it has a host of critics.

Run a simple search on the web and it is easy to find residents in towns such as Brighton and Bristol who are angry about what they think are botched public services by the group, who handle HR, property and more besides IT. Private Eye simply refers to 'Crapita'.

Then there was the Individual Learning Account (ILA) scheme which Education Secretary Estelle Morris abruptly pulled the plug on last November. It turned out fraudulent training providers were using individuals' names they gleaned from an insecure computer system to get their hands on extra millions in funds. Capita was in charge of that system.

Today, Transport for London, the group trying to sort out the mess that is transport in the UK's capital, awarded Capita a five-year £230m contract to handle the bulk of Mayor Livingstone's congestion charging scheme.

No surprise - Capita was named preferred bidder last December and it has also recently won the prestigious £500m TV Licence collection contract - but a big deal in every sense.

Every major project will involve different sets of people, so throwing mud at a congestion scheme because of past mistakes elsewhere is a little unfair, but the choice of Capita is a gamble.

Clearly Transport for London and Mayor Livingstone's right-hand man, travel supremo Bob Kiley, don't think so. The contracts announced today will ultimately be more important for them than the technology providers they name.

silicon.com may write its fair share of stories about outsourcing contracts gone awry but believe us when we say we'd rather Livingstone, Kiley and bigwigs at Capita et al get this one right.