Plas Madoc: Is there another reason why the council is closing it?

The document attached is headed CAPITA and THE SPORTS CONSULTANCY.

capita2

In 2012 these two companies came together (1) to develop leisure services.
An example of this is in Darwen, Lancashire (2), where a leisure centre very similar to the one proposed for Wrexham town centre has been built for £12m – an 8-lane 25m pool with room for 250 spectators, a small toddler pool and gym.

The Pricing document consists of two figures – one is for the review carried out by the consultants for £53,520 (this is in line with the £51,600 paid out by Wrexham Council). The other is for a “3-month quick win implementation” that adds a further £230,000 to the bill.

Our concern is that, in light of this document and the haste with which Plas Madoc is being closed, the consultants carrying out the options appraisal may have had an added incentive to opt for a new build, given their close relationship with Capita and the possibility that the council had been discussing a new build with that firm.

The new build leisure centre cannot happen without the immediate closure of Plas Madoc. Having a community-owned Plas Madoc would only provide competition to the new build leisure centre in Wrexham town centre and would therefore be detrimental to the business.

Capita is better known as Crapita, due to its long history of costly public-sector cock-ups (3). It is one of the leading private companies specialising in taking on public sector services.

Questions the council must answer:

1. How far beyond the initial options appraisal/review did the contract with The Sports Consultancy/Capita go?
2. To what extent did Capita discuss the proposed new build in Wrexham town centre with the council?
3. With regard to the consultation tender exercise, did the council seek additional tenders for a new build?
4. Who met with The Sports Consultancy/Capita – officers? Councillors – and over what timescales?
5. Was any elected member of the authority aware of negotiations with Capita?
6. Will Capita be involved in running the new leisure centre?

Quote from the Save Plas Madoc Leisure Centre campaign:

“This leaked document raises even more questions about the council’s openness and transparency over its plan to close Plas Madoc Leisure Centre. We wonder how people will feel when they hear that the council has been discussing giving more than a quarter of a million pounds to these firms and whether councillors are aware what’s being done in their name. The implications are staggering and need clearing up immediately.

“We urge the council to come clean about its negotiations with Capita and The Sports Consultancy. We have submitted a Freedom of Information request (4) to find out the answers but realise that this will be too late for next Wednesday’s decision. Bearing in mind how important it is for the full facts to be known, we urge councillors to vote against closing Plas Madoc in the full council meeting on Wednesday.”

BACKGROUND

1. http://www.thesportsconsultancy.com/index.php/2012/03/01/the-sports-consultancy-acquires-new-team/

THE SPORTS CONSULTANCY ACQUIRES NEW TEAM

1 March 2012, London: The Sports Consultancy is strengthening its expertise in the field of major event and venue consultancy with the Integration of the sport & leisure advisory team from Capita Symonds (part of the FTSE 100 company Capita Group PLC).

Tom Pinnington, Simon Molden and Chris Marriott join The Sports Consultancy with immediate effect bringing with them over 30 years’ experience in the sport and leisure industry, working with clients in both the public and private sector. The team has recently completed projects for UK Sport, the Olympic Delivery Authority, the Olympic Park Legacy Company, UK Athletics and the Government of Malta.

The new team adds major event feasibility, sport & leisure venue development, management & procurement advisory to The Sports Consultancy’s existing consultancy services advising brands, host cities and rights holders.

Commenting on the acquisition The Sports Consultancy Managing Director, Robert Datnow said, “This acquisition marks a key stage in the growth of The Sports Consultancy as we further enhance our reputation as an internationally acclaimed sports consultancy business. Tom, Simon and Chris share our professional, energetic work ethic and will make an excellent addition to our growing team”.

Simon Molden added: “We have been working alongside The Sports Consultancy on some high profile projects over the last 18 months. This formal arrangement will enable us to build on our existing services and offer a broader range of expertise, for the benefit of our all our clients. Crucially, it will accelerate our plans to significantly extend our offering across the UK and overseas”.

Published: March 1st, 2012 at 11:12

2. http://www.capita.co.uk/news-and-opinion/news/2010/march/external-works-completed-on-darwen-leisure-centre.aspx

3. http://www.computerweekly.com/feature/Capita-the-story-of-where-UK-public-sector-outsourcing-began
Born into service: Capita’s roots in Thatcherite liberalisation

Capita is a business process outsourcing firm that focuses heavily on the UK market. With annual revenues now hitting over £2.7bn, it has become a lynch pin in public sector outsourcing, which comprises 50% of its revenues. But before Capita came along, public sector outsourcing barely existed in the UK.

Capita’s history extends back beyond its incorporation to the early 1970s. The company’s real genesis lies in Thatcherism. It could be argued that without the Iron Lady’s policies, the environment for Capita’s inception and success wouldn’t have existed.

As the Conservatives eased into their new power in the early eighties, Rod Aldridge, who later founded Capita, was asked to investigate new ways for the Chartered Institute of Public Finance and Accountancy (CIPFA) to raise revenues. At this point, the Thatcher government was busy privatising much of the economy and driving efficiencies in the public sector. The emphasis was on local government to work more closely with the private sector, farming out contracts that would previously have been handled in-house. Aldridge conceived the possibility of servicing this market.

In 1984, CIPFA’s computer services division was launched, with just a couple of people on the payroll. Three years later, with 33 people working for the division, Aldridge launched a £330,,000 management buyout, backed by 3i. By 1991, Capita had increased its head count tenfold, and reached a turnover of £25m. It listed as a public company on the London stock exchange, two years after an initial public offering on the unlisted securities market.

From there, it gathered steam, reaching a turnover of £112 million in 1996, with a 3,500-person head count. During that year, it scooped an outsourcing contract with the Teachers’ Pensions Agency, and began a Recruitment and Assessment service for the government.

Two years later, turnover had more than doubled to £238 million, with pre-tax profits of £27.1 million. Head count had grown to 5,000 people and it continued to scoop up more contracts, including a payroll and pension service for the Metropolitan Police, and an outsourced human resources contract for Westminster City Council.

The company also began scoring contracts with central government during the early nineties, which helped to bolster its revenues. Over the years, it has netted contracts including a multi-channel BBC Information Centre, The Criminal Records Bureau, the Health and Safety Executive and, more recently, the DVLA, with which it landed a five-year, £100m contract to manage vehicle tax and insurance evasion. As New Labour continued the Thatcherite tradition of farming out public sector functions to more efficient private sector organisations, Capita cashed in.

Controversies along the way

But things haven’t all been rosy for Capita (which declined to participate in this profile), or for all of its clients. For example, in 2001 the London Borough of Lambeth severed a £48m contract with Capita, claiming that its benefits service had deteriorated after the company took it over in 1997. Problems peaked in 2000, when it faced 55,000 outstanding queries, and the quality of the service was deemed unacceptable by the council, leading to the canceling of the contract three years before its expiry date.

There were other controversies, too. In 2003, when Ken Livingstone was the Mayor of London, he admitted that he had come close to sacking Capita over its operation ofLondon’s congestion charge scheme. The company renegotiated the contract, agreeing to tighter performance targets, in exchange for another £31 million in revenues over four years.

The Criminal Records Bureau contract was also beset by problems. Capita proved itself unable to administer the completion of criminal records checks for teachers on time, which caused problems for schools in the autumn of 2002. The contract was once again revised and revenues renegotiated. Capita incurred penalty charges for that one.

In 2007, Capita lost a contract with Blackburn with Darwen Council, originally agreed in 2001. One Labour leader at the time said: “I was unhappy with the service, but under the contract we had to wait about five years before we could do anything. We didn’t feel we were getting particularly good value for money.”

In other contracts, Capita was found to have directly contributed to clients’ maladministration in the Individual Learning Accounts (ILA) contact. The ILA scheme was implemented in 2000 and abruptly pulled in 2001, after fraudulent activity was discovered. Credentials for individuals to access the scheme were being openly traded by both individual crooks and corrupt service providers, and used to cash out the accounts. People were still being prosecuted for fraud as late as seven years after the ILA debacle.

Longevity in public sector BPO
These gaffes among others earned the outsourcing company the informal name “Crapita” in irreverent publications such as Private Eye and The Register. And yet still, profits and revenues have soared. Its underlying profit before tax last year stood at £364m – up 12% year on year – on turnover up 2% at £2.75bn.

The BPO market has stood the firm in good stead over the years, thanks in part to an outsourcing frenzy in its core UK public sector market. In a report commissioned by Capita, IDC describes a £7.8bn market in the UK for business process outsourcing, and said that Capita had 23% of it (the same market share that it had in 2009). IDC estimated a total annual market potential of £117bn, indicating opportunities for growth.

But with the freeze of UK public sector spending, Capita is feeling the pinch. “In 2010, we faced a slowdown in decisions on major outsourcing contracts, lower additional spend by existing clients and reduced activity in some of our transactional trading operations due to constraints on public spending,” it said in its annual report.

4. FOI request to WCBC:
22 February 2014

Under the FOIA, I would like to make the following request:

1. A copy of the Stage 1 report by Capita and The Sports
Consultancy into the council’s leisure services.

2. All correspondence, electronic and otherwise, plus notes of
meetings held between officers of WCBC and Capita plus internal
communications between May 2012 and December 2013

3. All correspondence, electronic and otherwise, plus notes of
meetings held between officers of WCBC and The Sports Consultancy
plus internal communications between May 2012 and December 2013

4. All correspondence and notes relating to the proposed new build
leisure centre in Wrexham town centre (both with external
consultants and internally)between May 2012 and November 2013.

5. Details of tenders for the leisure review – including where they
were advertised, how many applicants and their perameters?

5. A list of the meetings between WCBC and The Sports Consultancy
and/or Capita between May 2012 and November 2013. Detail those
present.

6. Details of the involvement of elected members in any
negotiations with Capita and/or The Sports Consultancy.

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