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back to article Capita and Birmingham City Council 'dissolve' joint venture

The long-running and highly criticised joint venture between Capita and Birmingham, England, City Council is being rubbed out, reportedly saving taxpayers around £44m. The Service Birmingham Partnership was established in 2006 – Capita was the majority shareholder – with some grand ambitions to save the council £500m, generate …

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  1. Anonymous Coward
    Anonymous Coward

    Been there, billed for that

    I've been on both the public and private sector side of that sort of partnership and the first thing that happened on the transition from the former to the latter is that we were instructed to bill for everything, particularly those things that weren't previously recharged internally.

    Promises of cost savings get the contracts signed, abandoning those promises directly and immediately improves the bottom line afterwards. And the whole scene unfolds with a tedious inevitability.

    24 0 Reply
    1. Anonymous Coward
      Reply Icon
      Anonymous Coward

      Re: Been there, billed for that

      As an employee of a huge company being reamed out by HPE (or whatever they're called this week), I can confirm that the modus operandi is exactly the same between outsourcers and private sector clients. The industry speak for the approach you describe is "back loading of revenues", although for private sector companies the outsourcers usually try and appear cheap for the first couple of years.

      Then it's open season. Bill for everything, and make sure anything not specified in the original contract is a "special variation order", charged at £700 just to raise the ticket, and then whatever the outsourcer has the gall to bill for in respect of "delivery".

      12 0 Reply
  2. Rich 11

    Crapita strikes again

    I don't think I can constructively expand on this title.

    21 0 Reply
  3. John Smith 19 Gold badge
    Unhappy

    One personss flagship is another persons cash cow.

    And the word (allegedly) came down "Milk the b**ch hard."

    Local government.

    Where the only think capable of making larger (alleged) savings than outsourcing is insourcing.

    Mind you 3 years untangle this (when Whitehall cannot seem to untangle their contract on a timescale of decades) is greased lightning.

    Let's see if the gradual sharing of back office services across the 12 councils of the region is more effective at actually saving money.

    4 0 Reply
    1. Anonymous Coward
      Reply Icon
      Anonymous Coward

      Re: One personss flagship is another persons cash cow.

      Councils only like to share when they are the ones running the service on behalf of others. Otherwise sod the savings, I want re-elected.

      5 0 Reply
  4. Anonymous Coward
    Anonymous Coward

    I have to live in Birmingham

    so have learned to party like it's 1999.

    On a serious note, I have written tens of thousands of words on how shite the Council Website is whilst at the same time ignoring the offer to "give us some pointers". Mainly because - despite the amount they spunked on this venture, they wanted it free. As in beer, not speech.

    5 0 Reply
  5. Doctor Syntax Silver badge

    Is it so difficult to work out? If providing some part of the job well requires X people being paid £Y to do it then handing it over to someone else who will be expecting to make a profit is going to either cost more to cover a profit or is going to be done less well by employing less than X people. If there are genuinely savings to be made in the operation why not make them yourself and cut your costs rather than let someone else make them and keep the savings?

    15 3 Reply
    1. Cynic_999
      Reply Icon

      @Doctor Syntax. What you say is far from being true. Whether to do something in-house or to outsource involves weighing a great many factors, and the answer will depend on a lot of variables, the biggest being the scale of the operation you are thinking of outsourcing. If, for example, your company needs to have a new plastic injection moulding tool about once a year, then setting up a machine shop and employing a toolmaker would cost far more than outsourcing the task. Even if your needs would just about keep a toolmaker fully occupied, the outsourcing company will benefit from economy of scale, have more total expertise available and probably still be considerably cheaper. Any company that attempts to be a jack-of-all-trades will usually end up being master of none.

      If doing it in-house were always better than outsourcing, you'd only be eating home-grown food and making your own soap etc.

      7 7 Reply
      1. Terry 6 Silver badge
        Reply Icon

        Excluding special cases, like buying in a one-off service DrSyntax' reading of the situation is impeccable. The case for outsourcing rests on two planks; 1.) idealogical belief that in some magical way privately employed teams will be more efficient than in-house public employees, effectively creating a myth that public employees are feather-bedded and work shy- i.e. Public=bad Private=good. And 2.) the bean counters' view of staff just being a cost, so think that replacing as many staff as possible with fewer, cheaper staff who are supposed to be able to do the job as effectively as the in-house team did will save money without losing the existing level of service.

        However, in reality in-house team members, more often than not, will work flexibly and supportively out of good-will and team spirit. Privately employed service staff often don't see themselves as being on the same team, are often exploited with poor pay and long hours underlying impossible and generic targets that don't actually let them do the job properly,- especially where the task description doesn't fit the reality - even when they want to. But meanwhile the company that employs them is taking a large cut - money that could have been used to get the job done properly. So the private cleaning contractor will look at the spreadsheet and say that cleaning a classroom must be completed in 7 minutes. Which doesn't take into account that five of those minutes may be needed to get the Pritstick and paint off the desktops. Nor does it take into account that the in-house cleaner used to help get the school hall ready for parents' evenings or that the inhouse cooks used to make special cakes when the local team was playing. Under the new contract the school would have to pay for an extra hour of cleaning at some exorbitant rate for "extras" and there would be no special cakes unless the school paid extra for them, and so on.

        19 2 Reply
        1. HmmmYes
          Reply Icon

          Hard to say of the private v. public.

          Some public services are very good and deliver a great, vlaue for money service.

          However ....

          A lot of my dealings with the public sector are centered around the NHS, education and Northern local authorities.

          Each sector has a number of hard working individuals but .... you repeatedly come across people who are useless. The really really useless ones are off on long term sick.

          The main difference between the private sector is the ability to deal with unsuitable workers i.e. sack them. The public sector dont really have an equivalent to recession. When they do have funding cuts its very much last-one in, first one out. Thats nuts.

          The other problem is the public sectors ability to adapt to change. The use of computers/software is very much a moot point. Here the peole dealing with it are people who used to deal with paper. So rather than paying the going rate for someone, they end up taking on 5 over annuated clerks. Disaster.

          The public sector working emthod is to thorw lots of low skilled pople at a problem. In LAs, it throw lots of low skilled people related to the peole already meant to be doing the work.

          2 2 Reply
      2. Doctor Syntax Silver badge
        Reply Icon

        @Cynic_999

        Dammit. I meant to write "service" and somehow "job" got in there instead. You're right, of course, where there's specialist investment in equipment required the job can usefully be outsourced. But the sort of labour-intensive service provision jobs that are being outsourced in situations such as the article describes don't easily gain from capital investments in the same way.

        Another example would be health care provision. Locally,district nurses and various other services have been shifted to some not for profit organisation. The management gets paid more but the nurses are reportedly breaking down from overwork.

        5 1 Reply
    2. handleoclast
      Reply Icon

      The savings

      Savings can be made. The council fires staff that are no longer needed. The outsourcer hires those staff with new contracts that mean they get paid a lot less. Council staff tend to be unionized whereas outsourcers tend to frown upon unions, so the outsourcer's new hires have very little leverage to use in getting decent pay.

      So savings can be made, at the expense of the workers. Those savings are then spunked on the salaries of management and in dividends to shareholders, so overall it costs more. But those savings are how the scheme gets the council to agree to it.

      Some schemes, such as privatizing parking fines, also take great chunks of money from the public (often by abusing the rules). That money goes in the management's pockets, of course.

      Of course it's a scam. What else did you expect?

      7 0 Reply
  6. John Brown (no body) Silver badge

    Register Campaign

    Inspired by the article header photo, can we all agree that outsourcing from now on will be referred to outhousing? It just seems so much more appropriate. It always costs more and everyone gets shit on.

    20 1 Reply
  7. Chris G

    Preferred Headline

    Capita and Birmingham City Council 'dissolve'

    I more or less 'Ran' a South London contract some years back as the lads left over from the Council who supposedly knew how to run things had not the first clue, they cottoned on to 'variation orders' pretty quickly though, without those the whole thing would have gone down the drain in year one.

    2 0 Reply
  8. PNGuinn
    Mushroom

    Crapita

    One down n-1 to go.

    Bring it on. That is all

    6 0 Reply
    1. Anonymous Coward
      Reply Icon
      Anonymous Coward

      Re: Crapita

      Hoping the Crapita contract I work on is next. We all have our fingers crossed that the "joint venture" partnership is dissolved.

      0 0 Reply
      1. Anonymous Coward
        Reply Icon
        Anonymous Coward

        Re: Crapita

        Ditto - and I have a funny feeling we work on the same Crapita contract. Hopefully the joint venture will be dissolved and everything will come out in the open.

        0 0 Reply
  9. Anonymous Coward
    Anonymous Coward

    A certain west london council has gone the same way

    A much smaller player than crapita though.

    AC as friends of mine have been tuped back in. I well remember the sales pitch about a JVC and how it would deliver savings and the Council investment agenda. All the risk was going to be transferred to the private provider and the benefits would accrue to the Council.

    Now, it is more efficient to do it in house. Plus Ca Change! or whatever the French pithy aphorism is.

    1 0 Reply
  10. keithpeter Silver badge
    Coat

    Sun Java Desktop in Central Library

    Talk of partying like it is 1999 (and we had some good parties then) does anyone else remember the Sun Linux based client computers in Birmingham Central Library? Circa millennium or a little after. Netscape 4 and StarOffice and I think it was a Gnome desktop.

    I asked the library assistant how people coped with these and she said "the younger ones just sort it and the older ones need help whatever system it is".

    Coat: off out now to admire the view from the top of our new and hugely expensive Central Library as I heard a rumour that the Shakespeare Room is actually open today.

    http://www.computerweekly.com/news/2240075813/Birmingham-trials-Linux-in-40-libraries

    Above is a later experiment. Perhaps we can have another try as email is Zimbra?

    1 1 Reply
    1. Julz
      Reply Icon

      Re: Sun Java Desktop in Central Library

      That's likely to have been SunRays if so Solaris not Linux.

      1 0 Reply
  11. Anonymous Coward
    Anonymous Coward

    As a Birmingham council tax payer,

    I'm expecting my bill to go down. In fact, send the rebate to ...

    1 0 Reply
  12. PeterM42
    Facepalm

    And WHO believes

    "Over the past 10 years the partnership has successfully delivered significant savings.".

    If that were true, they should be able to quantify.

    4 0 Reply
  13. Anonymous Coward
    Anonymous Coward

    Crapita

    Lets hope Southampton City Council see the light and are the next ones to say Au Revoir to Crapita!!!

    0 0 Reply
  14. Anonymous Coward
    Anonymous Coward

    Good timing, since Capita have a huge outage today at one of their datacentres affecting all staff and many many customers

    1 0 Reply
  15. Anonymous Coward
    Anonymous Coward

    Crapita

    Worked for Crapita the shower of rubbish that they are, only interested in one thing, and we all know that any contract not making any money the bods at the top have told them to get rid, clearly happened in this case along with others as well.

    What a an awful place to work, only confirmed by their terrible Glassdoor reviews!

    Good riddance!

    0 0 Reply

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