Branch seeks meeting, sight of contingency plans, and commitment to insource
Yesterday saw tumultuous events on the UK stock market as the future of outsourcing as a proper model of public service provision was again called into question.
Hot on the heels of Carillion’s collapse, Capita plc had to issue a profits warning, seek a massive equity injection, and lost 47.5% of its company value in a single day.
Comments made by the Capita CEO Jon Lewis in a communication to all Capita staff on 31st January acknowledged that Capita is “…now too widely spread across multiple markets and services.” That “…Capita has under-invested in the business and there has been too much emphasis on acquisitions to drive growth.” And that Capita is “….driven by a short-term focus.”
Much of this of course reflects the justified criticisms that UNISON West Sussex and others have made consistently for years about Capita and its business model, which have led to such difficulties in West Sussex.
Capita CEO Jon Lewis went on to say, “…there is an immediate priority to strengthen the balance sheet. This will be achieved through a combination of cost saving, non-core disposals and through equity investment.”
The branch is very concerned about the future stability of the West Sussex Capita partnership and its ability to continue to deliver. It must now be considered a real and present danger that Capita could either go completely bankrupt, as Carillion has done recently, or that Capita will seek to divest itself of the West Sussex contract if it is not seen as part of core business, now or in the future, or is not sufficiently profit-making for it to make an active contribution to Capita’s recovery plan.
Members who work for Capita are of course telling us they are extremely concerned for their jobs and livelihoods. Our members who work for the council are concerned for their Capita colleagues, but also for the continued provision of the services they rely on to support West Sussex residents.
- The branch has therefore written to Nathan Elvery, West Sussex Chief Executive, to seek a meeting to discuss the current crisis and the council’s contingency plans for the services.
- We have asked to see a copy of the council’s contingency plans for Capita no longer being in a position to provide West Sussex services.
- We are also seeking a commitment from the council to insource the services if Capita goes bankrupt or withdraws from the West Sussex contract. This seems to us now to be the only viable future for the services.
We will keep you informed.