Capita now manages one million child trust funds since it took
over policy administration for financial services firm The
Children's Mutual.
Capita provides back-office services for The Children's Mutual
after the outsourcing supplier took over the administration of
funds, including IT and customer contact, in 2004.
The Child Trust
Fund is a savings and investment account for children set up by
Tony Blair's government. Children born on or after 01 September
2002 receive a £250 voucher to start their account. The fund has
about four million funds in total today.
In 2005 The Children's Mutual realised that offering Child Trust
Funds would increase the volume of business it managed. It decided
the most efficient option was outsourcing.
Children's Mutual CEO David White said, "We knew if we got our
positioning right we would get a big chunk of the market. The
question was 'do we scale up our own technology or do we
outsource?'"
He said he "swallowed hard" when he decided to outsource its
administration of existing policies and Child Trust funds to
Capita. "If I had to make the decision again I would do the same,"
he added.
The agreement signed almost exactly five years ago was
projected to generate revenues to Capita of £430m over 20
years.
White said the introduction of the Child Trust Fund meant
business volumes rose sharply. Before the firm became a provider it
would on average add 40,000 new policies a year. But this year it
will add 180,000. The company now manages about a quarter of all
funds.
As part of the outsourcing contract, 200 Children's Mutual staff
transferred to Capita. The firm kept a skeleton IT staff on to
liaise between other departments and Capita.