Spending with Capita by Central and Local Government

We are delighted to feature a post by Ian Makgill of Spend Network on Government spending with Capita. Following Peter’s recent posts on Capita, Ian thought it would be interesting to took at Spend Network's data for an insight into the company’s operations in government. Here's what he found.

We found that Capita does business with 168 of the 177 public buyers in our database. Capita is used by all 17 of the large Central Departments, with an average spend of £36 million per annum. The tale of dominance doesn’t end there, we’ve looked at spending with all of the local authorities except district councils and found that 151 out of 154 use Capita in some capacity. Across these large councils, there was an average spend of £4.91 million per annum with only 8 councils spending less than £100,000 with Capita. Of the 154 Councils we looked at 62 Councils spent over £1 million and 14 spent over £10 million per annum.

Figure 1
Total transactions with Capita by central and local government buyer


What is also certain is that spend is growing and growing significantly. Revenues regularly exceed £100 million per month and 88 of its government customers increased their spend with Capita in the 12 months leading up to October 2013 with an average gain of over £5 million per customer. Whilst 81 customers shrank their book with Capita, the average fall was just £1.6 million per customer.

Figure 2
Total spend with Capita, split by accounts that have either grown between 11/12 and 12/13 or shrunk over the same period (NB spike is spend for £65m with DfE in May 2012)


blue = growth accounts
red  = reducing accounts

With less than three years of data, we can’t be sure of its performance on retention, but it seems that only seven buyers have dispensed with Capita's services in the 12 months leading up to October 2013.

It would seem, therefore, that the accusation that Capita is just a bidding machine with a hollow delivery arm doesn’t seem to stand up; it's not only good at winning business, it's also good at extending its reach once it starts working with a client. This might be down to additional charges on poorly managed contracts, but if that was the case we’d expect to see a stronger pattern of clients moving away from Capita.

Whatever the reasoning, it is hard to see any company rivalling Capita for its sheer reach and diversity of supply. I leave it to readers to determine whether or not this is a good thing, but it would be interesting to see what competition it faces in the coming years.


Data source: published spend statements by Central Departments and Local Government (excluding District Councils) between April 2011 and October 2013. www.spendnetwork.com


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First Voice

  1. Secret Squirrel:

    Not surprised by the number of ‘users’. They’re the main supplier of contingent labour.

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