Outlook for Capita
Capita face some interesting challenges over the next few months.
Having retained their contract with the MOD for security personnel, Capita now face a challenge in the form of GPS (Government Procurement Service), who are about to go to market for a Government-wide non-permanent staff contract which GPS estimates to be worth around £500m, whilst we estimate the spend to be closer to £430m. The problem for Capita is that they currently have over 30% of the market through the DWP’s CIPHER framework for interim staff and a place on GPS’ own framework.
With GPS putting in a new contract to replace their own framework and mandating its use, CIPHER and other frameworks will be given only a six months to allow for transition to the new contract. With the largest market share, Capita face a worrying wait to discover if they have a place on the new framework. If not they could see a big dent in their future income.
What will be causing the most concern for the Resourcing team is the threat they face from the competition, GPS will adopt a Vendor Neutral / Master Vendor model of supply using only three suppliers which opens the market to some aggressive new competition from the likes of Matrix SCM, Comensura and Addecco, all of whom have been winning business in Local Government for the last six years a sector where Capita’s market share has dropped.
The first significant Vendor Neutral contract in local government was let by AGMA (the Association of Greater Manchester Authorities) nearly seven years ago, since then two Vendor Neutral (Comensura & Matrix SCM) suppliers now control nearly 60% of the Local Government market between them and they continue to dominate the market via a single framework let by ESPO (The Eastern Shires Purchasing Organisation). If the same were to happen in Central Government Capita Resourcing could face a challenging future with only limited private sector business to fill the gaps.
For a real insight into the market for agency staff in Central Government we have published a detailed, 170 page report on agency staff in Central Government. Find out more here.