Capita beats Carillion to £2bn schools job

Capita has beaten off competition from Carillion to be chosen as preferred bidder for an education outsourcing contract in Staffordshire worth up to £2bn.

Last week, Conservative-run Staffordshire council’s cabinet members approved a plan to make Capita its private-sector partner in a joint venture which would part-privatise the local authority’s education service.

The award came after Carillion’s bid was targeted by the GMB union as part of its ongoing campaign to deny the firm public sector work because of its alleged history of blacklisting.

The 20-year deal - which would give Capita a majority stake in the joint venture - would include the construction of a headquarters building and a £17.5m academy as well as covering services ranging from catering to building maintenance in 400 schools.

Both Carillion and the council strongly deny the GMB’s campaign had any bearing on the decision to select Capita.

Last month, the GMB organised a public meeting and wrote to every headteacher and chair of governors in Staffordshire to protest at the principle of the outsourcing plan and at Carillion’s bid.

“A bid from Carillion is unwelcome until they properly acknowledge the vile history of blacklisting […] and compensate the workers whose lives they blighted,” the letter stated.

Ron Clarke, Labour councillor and member of the scrutiny committee, said he believed the GMB’s campaign may have counted against Carillion.

“The fact of the matter is that the GMB has challenged Carillion […] and I think this could have had a bearing,” he said.

Carillion’s bid was also hit by controversy in October when MP Paul Farrelly alleged a potential conflict of interest involving the council manager in charge of the outsourcing – Phil Cresswell - who left to join the Carillion’s local government division as a business development director.

A spokesperson for Carillion said it was clear that the council’s decision was “based entirely on a commercial assessment of the bids”.

The spokesperson added: “The GMB’s shocking campaign of misinformation against Carillion has not influenced the decision. Hence, Carillion has been selected as the reserve bidder.”
Asked about Cresswell, both Carillion and the council denied any conflict of interest, saying he was removed from involvement in the bid once it became known he was leaving to join the contractor.

In separate news, Carillion released a trading update on Wednesday, predicting a “substantial increase” in its pre-tax profit for the full year 2012 compared with 2011.

The contractor also said it expected a drop in revenue over the period and announced that it has bought a 49% share in Canadian support services firm Bouchier Group for £24m.