Norfolk Council ends £50m Capita contract after only four years

Norfolk County Council’s decision to end its £50m deal with services giant Capita after only four years has underlined the...

Norfolk County Council’s decision to end its £50m deal with services giant Capita after only four years has underlined the importance of flexibility in e-government contracts, the Society of IT Management said last week.

"When you are working in IT and e-government you need to ensure that your contract takes innovation into account and that your strategic partner is prepared to work with new suppliers of your choice," said Kate Mountain, chief executive of Socitm, the public sector IT user group.

Norfolk County Council pulled the plug on its contract with Capita for exchequer, payroll, pensions and IT services after it proved incompatible with the council’s e-government strategy.

Earlier this year, Norfolk County Council adopted the new plan, which involves a range of procurement strategies for electronic services in areas such as social services and human resources.

However, the council and Capita have been unable to agree a working arrangement within the new framework.

"Time has moved on since the contract was signed back in 1999 and our needs and priorities as an organisation have changed," said Alison King, leader of Norfolk County Council.

Both organisations are working on the contract closure arrangements. These will include payment to Capita of entitlements under the terms of the contract, although the council would not reveal the sums involved.

Simon Pilling, Capita’s executive director, said it was disappointing that Norfolk County Council had chosen to end the agreement, and pointed to the successful performance of the core contract.

A joint statement from the two organisations said the outsourcing firm had achieved a performance rating of 98.6%, measured against its 70 targets in the past year.

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