Select Committee on Public Administration Minutes of Evidence


Teachers Pensions Agency (Darlington)

  Capita was awarded this 7-year contract in April 1996. 445 staff were transferred to Capita under TUPE. We were engaged by the DfES to administer the Teachers' Pension Scheme and we inherited a business with a heavy reliance on paper to deliver its service. Capita has transformed the business from a paper-dependent operation to a paper-less operation by the application of leading-edge technologies and an extensive programme of process re-engineering.

  Capita is now a major employer in Darlington and has a significant local presence. The Darlington Business Centre currently employs over 600 staff, an increase of over 30 per cent since the start of the contract and provides other public services including ILA, Winter Fuels Helpline and Connexions Card. The Business Centre also administers a number of private pension schemes for the motor industry, AT&T, GRO logistics, Black and Decker and Gillette.

  Capita has nurtured a successful client relationship with the client based on a partnering approach and a clear understanding of the service. Our win-win management style focuses on realising common aims and goals. Through this partnership and focus we have transformed the TPA customer service by:

    —  Significantly re-engineering the call centre provision to deliver rapid responses to over 600,000 enquiries and requests for information from 1.4 million users—pension scheme members, employers and pensioners;

    —  Significant investment in modern systems to provide electronic capture of forms and related correspondence, providing significant reduction in processing times, enabling highly efficient information access, delivering high performance levels;

    —  Extending the range of work subjected to performance monitoring and reporting. In the business year ending 31 March 1996 there were 10 service targets; today we have 27 and in all cases performance has improved.

Average performance statistics for the year
AreaAverage Performance Number of Targets
Retirements98.9% 8
Membership and AVC97.3% 7
General correspondence98.5% 3
Telephone enquiries97.2% 3

Number of complaints 2000-01: for the last 3 contract years

    —  Providing web-based services that have been received positively by service members—During August and September 2001, the website had 200,000 hits;

    —  The website provides an information-based service covering frequently asked questions (FAQs), key publications and news items and a secure and robust method for online transactions for members and employers.


Winter Fuels Payments (New Rules) (Darlington)

  Capita was awarded the initial contract to administer the Winter Fuels Payments (New Rules) in May 2000. The original contract covered the end-to-end process for retrospective payments and the Winter 2000 payments to pensioners in GB and Northern Ireland. The contract originally ran for 1 year and was extended by a further year to May 2002. The client, the Department for Work and Pensions (DWP—formerly the DSS), initially looked for a "temporary" stop gap to an urgent problem and planned to revert to in-house delivery once a "steady-state" was achieved. A strong relationship has been developed and negotiations have recently commenced to potentially extend the service for a further period. As this was a new service, no staff were transferred under TUPE.

  Our service model includes telephone and internet information and claims services, an in-mail service, claims processing and the provision of payment files to DWP's national processing centre. In year 1 we dealt with around 2.7 million potentially eligible cases and created payments totalling £450 million. In year 2 we are dealing with around 300,000 eligible cases. Capita has delivered a successful service because:

    —  We were able to rapidly mobilise staff, accommodation, systems and processes to address this urgent need effectively and create a viable service within 2 months of contract award;

    —  We have designed a service delivery model with a strong customer focus offering easy access to information and assistance, an aspect particularly important for this client group;

    —  We have converted a heavily paper driven system into a virtually paperless one. This has reduced the risks of unnecessary duplication, errors and delays/ bottlenecks in workflow;

    —  We consistently fulfil the challenging service levels we have agreed with the client. For example all telephone calls are answered within 30 seconds, with an abandonment rate of significantly less than 5 per cent;

    —  We have used technology creatively to support the prompt payment of claims for example by pre-populating forms and through automated payments, multi-channel access to information and service and electronic data capture;

    —  Three customer satisfaction surveys have been conducted since the service began, focusing on our helpline. The results indicate high levels of satisfaction;

    —  We believe we are considered locally as an approachable, fair, open and reasonable employer. We help our staff develop and realise their potential quickly and foster a passion for high standards of customer service.


Driving Theory Test (Coventry plus over 150 local test centres)

  Capita began the contract to run the UK's first driving theory test in January 1996 through a subsidiary company—DriveSafe. In selecting a contractor to administer the driving theory test, the Driving Standards Agency (DSA) and Driver & Vehicle Testing Agency (DVTA) in Northern Ireland set very high performance standards in three main areas:

    —  A central administration centre—to co-ordinate all the office functions, such as booking, scheduling and payment for the test;

    —  Local testing centres—to supervise registration and invigilation of tests;

    —  Support services—to supervise the printing and distribution of the test papers, the scoring of the test and delivery of the results both to the candidates and to the driving test authorities.

  The contract ran until December 1999 when, after open competition, it was transferred to an alternative supplier. We believe it was a successful service because:

    —  We were able to rapidly mobilise staff, accommodation, systems and process to address this urgent need effectively—the first tests were taken within 6 months of contract start. During this 6-month set-up period we:

      —  Acquired and refurbished 150 test centres;

      —  Established a purpose-designed administration and call centre in coventry capable of handling over 9,000 calls and bookings a day;

      —  Recruited over 1,000 staff to service up to 2 million enquiries for an estimated 1.5 million driving theory tests per year.

    —  In the first month of live operation staff answered 120,000 calls, processed 150,000 telephone bookings and postal application forms and supervised some 130,000 people taking their test;

    —  Test papers were translated into seven languages—Welsh, Urdu, Bengali, Hindi, Punjabi, Gujerati and Chinese;

    —  Over 30,000 test papers per week were marked, using latest technology for speed and accuracy;

    —  Clear priorities that we shared with the client had to be reflected in our service delivery model:

      —  High standards of customer service, in particular speed and accuracy of enquiry response and workflow;

      —  Strong financial controls to support the collection of £20 million pa in fees;

      —  Strong authentication, invigilation and other controls to protect the system from technical fraud (ie cheating).

    —  We consistently fulfilled the challenging service levels, for example answering 95 per cent of calls within 10 seconds;

    —  Customer satisfaction surveys were conducted monthly to give feedback on the performance of the test paper and on customer and public service aspects. We consistently achieved results of 95 per cent and over;

    —  We worked successfully with DSA and DVTA to:

      —  Help manage the relationship with the industry;

      —  Develop and improve the test papers;

      —  Tighten controls on fraud and cheating;

      —  Develop service enhancements addressing diversity issues such as language and disability.


Blackburn with Darwen Council

  Blackburn with Darwen Council and Capita have established a strategic partnership for the development, delivery and modernisation of a range of Council services—human resources, architects, property management, highways management/consultancy, ICT, elements of financial administration, customer relations management, some school business support services, social services administration, housing benefit administration, and council tax and NNDR collection.

  The Council sees this Strategic Partnership as integral to all its activities and expects it to contribute to its objectives including its Local PSA targets. This Partnership became operational from July 2001 and nearly 500 staff have transferred to Capita under TUPE regulations—they will retain their local government pensions. Staff and their unions have been fully involved in the procurement process and are supportive of the Partnership. There were no appeals against TUPE transfer.

  Capita is contractually committed to:

    —  Building a modern business centre in the centre of Blackburn which will be integral to the Council's town centre regeneration programme—this will be built by April 2003;

    —  Investment programmes for e-government and service improvement targets—aiming for all services to be in the top quartile—significant progress on service improvement has already been registered;

    —  Creating work for 500 people within five years, over 100 have already been created from new Capita contracts;

    —  Local recruitment targets and employment diversity targets;

    —  Local purchasing targets for supplies and services.

  Capita will represent the Partnership on the Local Strategic Partnership and chair a local employers group. The Partnership is committed to support business development, especially with other local public sector agencies and there is a profit share arrangement.

  The basis for this pioneering Partnership is one of trust and common commitment to shared objectives. The Strategic Partnership is overseen by a Strategic Partnership Board (SPB), which is chaired by the Leader of the Council, and comprises equal senior member/officer and director representation from both partners. The SPB will agree a three-year business development plan; monitor performance at a strategic level; negotiate change; enable both partners to support business development and ensure that the Partnership contributes to the Council's Community Strategy objectives. There will be arrangements to involve stakeholders. The SPB will be supported by a Partnership Operational Board, which will consist of client side managers and Capita operational managers.

  The Strategic Partnership will last for 15 years and will be subject every five years to a fundamental best value review—the reviews will be of the entire Partnership and not elements of it—the Council recognises that the Partnership objectives have a value which will be taken into account in these reviews. This review process will include external benchmarking.

  A major e-government project has been established to work with other public sector agencies in the area. The aim is to create a regional business centre to provide shared support services to other public sector bodies.


Norfolk County Council

  Capita was awarded this 10-year contract in July 1999. Capita works in partnership with Norfolk to provide ICT services including helpdesk support, ICT development and maintenance, and Exchequer services including payroll and pensions. 150 staff transferred to Capita under TUPE providing payroll services for 33,000 Council staff and the administration of over 12,000 pensions. The 10-year partnership is part of the Council's commitment to Best Value, the Modernising Agenda and the Council's requirement to implement innovative solutions to support e.government, the high level of change required to achieve the Council's Pathfinder targets and the investment needed to upgrade the Council's infrastructure.

    —  14 per cent savings over the life of the Partnership;

    —  Opportunities presented by alternative funding models which the Partnership is pursuing;

    —  New Business Centre established in Norwich;

    —  Specification and procurement of new Financial Management system;

    —  Migration of some 4,000 users from the existing e-mail system to Microsoft Exchange;

    —  Contribution to the Council's wider community well being objectives;

    —  Development and implementation of an e-government programme for the County—the County Council and other public sector bodies—PFI credits have been awarded;

    —  High levels of performance providing a reliable consistent and stable service during this period of change.

  A board comprising senior Norfolk County Council and Capita executives, along with Council members, jointly manages the partnership. The Council has asked Capita, as its strategic partner, to work as part of a team to help it to achieve its e.government targets. The Council and Capita are working closely together to produce a programme to meet the Council's challenging timetable. An all-party elected member group ensures that the appropriate direction is given while elected Members and Chief Officers are regularly briefed on progress and make all key decisions.

  The Partnership's e-Government Change Programme will promote real efficiencies for the Council, improve access to services for Norfolk's widely spread population, and enable the Council to respond to the continually increasing expectations of the public. The integrated programme has three major elements:

    —  A new Service Delivery Model that describes ways in which front line services can be delivered;

    —  A Council-wide ICT framework and proposals for extensive enhancements to the technical infrastructure required for effective delivery of services;

    —  A Best Value Review of the services that are essential to underpin front line service delivery.

  Achieving change in tight timescales needs a wide range of skills and capabilities, often at short notice or for limited periods. It is precisely our flexible long-term partnership approach that enables Capita to source the investment needed to keep services fresh, while bringing in our experts to tackle specific issues and services without the Council needing to employ staff for short-term needs. It ensures the best resources for the job, instead of relying on an extensive in-house skills base.


Mendip District Council (Shepton Mallet, Somerset)

  Capita was awarded the initial 5 year contract at Mendip in July 1993. This has subsequently been extended by a further 7 years to run until June 2005. 85 Mendip District Council staff were transferred to Capita under TUPE. We deliver the majority of Mendip's finance, exchequer and IT services, together with some related services such as electoral registration and internal audit. Initial service priorities included clearing a substantial backlog of housing benefit applications; the development of a Council Tax system and the management of the residual community charge debt.

  With Mendip DC we believe we have created a successful relationship built on mutual trust and respect. Partnership direction is set and managed via a Strategic Partnership Board comprising of senior Capita and Mendip representatives. Some key highlights of our success with Mendip are:

    —  We delivered initial savings on service delivery costs of 15 per cent and these were further improved when the contract was renewed in 1997;

    —  A seamless and rapid transition from Mendip service provision to Capita service provision;

    —  High standards of service delivery—consistently meeting performance targets and delivering measurable service improvements through the continual review of our business processes and service outcomes;

    —  Removal of Housing Benefits (HB) applications backlog and sustaining a high standard of HB service. The following table is taken from the results of the Best Value HB User Satisfaction Survey 2000-01—a survey of both successful and unsuccessful claimants;
Service % Satisfied
Face to face84
Understanding of claims forms62

    —  Improvements in revenue collection rates and housing benefit application processing times — this is illustrated in the following table:
Collection Rates
Service DescriptionMendip (1993-94) Capita 2000-01
Council Tax collection93% 98%
Business Rates collection94% 97%
Housing Benefits processed within 14 days 53%98%

    —  Utilising Capita's existing datacentre assets to release Council accommodation for other priorities;

    —  Managed migration from legacy IT systems to modern platforms;

    —  At contract renewal in 1997 an external audit report confirmed "above average service levels and below average costs";

    —  Staff transferred under TUPE and those recruited have been able to widen their experience and further their careers at Mendip and across the Capita Group;

    —  We have grown the Mendip site to provide services to other local authorities and to local businesses and through this deliver vfm advantages to all those customers.


BBC Information Centre (Belfast and Glasgow)

  The BBC Information Centre offers multi-channel access to information about BBC services covering a wide range of topics including programme content and related support services, signal issues and complaints. Capita began the 5-year contract to operate the service on behalf of the BBC in December 1998 with the transfer of 105 staff under TUPE from Broadcasting Support Services (BSS) in Glasgow. The service supports "unsolicited" contact, mainly from our Belfast site, and "solicited" contact instigated through campaigns, mainly through our Glasgow-based operation. The BBC's vision for the service was to be a "centre of excellence", continually meeting customers changing expectations so that more than 90 per cent of all customers rated the service as "very good". At the point of transfer to Capita this satisfaction rate was below 70 per cent.

  We believe we have succeeded in transforming the service by:

    —  Delivering a 25 per cent annual service cost improvement from start-up;

    —  Fostering an extremely strong partnership with the BBC based on openness and cooperation;

    —  Investing in highly effective Knowledge Management systems and training that empower our contact agents to become advocates for their customers, responding rapidly to enquiries and adding value, for example by suggesting related topics that may be of interest;

    —  Working closely and effectively with the BBC to ensure:

      —  Efficient resource planning, in particular to anticipate high contact levels arising from the broadcast of topical programmes or controversial subjects;

      —  That our contact agents can accurately fulfil wide-ranging enquiries rapidly;

      —  Customers' feedback is delivered directly to the programme makers;

      —  Issues/complaints are resolved promptly and effectively.

    —  Achieving high levels of first-time call resolution — we have no hand-off arrangements to fallback on and we aim to restrict call-backs to very minimal levels.

    —  Engendering in our staff a passion for customer service and a pride in the BBC "brand"/reputation. Creating a culture where staff are not threatened by challenging business targets but are keen to achieve high standards and continuously improve them;

    —  Achieving the BBC's vision for continually matching customer expectations—Independent customer surveys operated initially by NOP and more recently by MORI have demonstrated consistently high levels of customer satisfaction. Regularly, more than 90% of customers have rated our service as very good or better;

    —  Providing continuity of service through higher than average staff retention rates. We can offer very diverse and interesting work and we invest in our people through extensive training, performance and career management to achieve. We have been rated highly as an employer by the Investment in NI Board and our remuneration packages are regularly market tested and demonstrated to be in line or above local averages.

    —  Continuing to invest in modern systems and training to:

      —  Further improve our response times and fulfilment capability;

      —  Create a "virtual" contact centre between Belfast and Glasgow to optimise our resource management and improve our response capability, particularly important at busy times.


Education Leeds (Leeds City Council)

  Capita is working as a partner of Leeds City Council in the management of Education Leeds, a company owned by the Council but managed by a Board of Directors. The company was created in response to an extremely critical OFSTED inspection report in 1999. The report was particularly critical of the low student achievement levels in the secondary sector and poor quality support services from the LEA. Step changes in performance were required to make substantial improvements and achieve targets agreed with the DfES.

  Capita is providing strategic education and management support under a 5-year contract commencing in April 2001. As well as providing strategic expertise and advice at Board level, Capita has a team of senior managers supporting the Chief Executive of Education Leeds in managing and improving services. The model is designed to inject national expertise, best practice and skills transfer to achieve the required step change in performance and to provide additional capacity to deliver sustainable change.

  The contract involves three payment streams. The first is a transition grant paid by the DfES via Education Leeds on the basis of agreed outputs that are set out in a Transition Plan. The second is a fixed management fee, paid by the Council. The third part consists of incentive payments, which relate to both the performance of Education Leeds and its impact on achievement levels in schools. Already we have been able to make a difference by:

    —  Helping to design and implement an interim management structure for the new company;

    —  Providing strategic advice and support both at Board level and directly to the Chief Executive of the company through our two nominated Board members;

    —  Adding significantly to the strategic management capacity of the company by providing some of our best senior education executives to fill three out of four second tier posts in the interim structure;

    —  Providing other Capita experts to support specific operational design and management issues;

    —  Putting in place robust school improvement support systems;

    —  Helping to develop a partnership between education and the business sector;

    —  Helping to develop a strategy that will deliver a "leading edge" model for secondary and post-16 education provision;

    —  Developing new models for securing private capital investment for schools (i.e. alternatives to PFI).

November 2001

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