Joint statement re contract

Capita Group PLC
18 July 2003

  Joint Statement by Norfolk County Council and the Capita Group Plc Regarding
                             Early Contract Closure


Norfolk County Council has decided to end its contract with Capita for the
supply of exchequer, payroll and operational ICT services. This termination does
not reflect any dissatisfaction with the performance of Capita on these core
services where the Council and Capita agree that performance has been very
successful.

Capita has achieved 98.6% performance against its 70 performance targets in the
last year, and has exceeded these targets on more than 50% of occasions. In the
last 6 months service levels have reached 99%.

The Norfolk/Capita partnership was signed in 1999 for the delivery of exchequer
and operational IT services. It was one of the earliest local government
partnerships.

In March this year, Norfolk County Council adopted a new policy approach to take
forward its broader e-Government development programme which will see it procure
each element of its e-Government strategy individually. Norfolk County Council
and Capita have been unable to agree a way of working with this which is
satisfactory to both parties.

The Council values and appreciates the work done by Capita staff based in
payroll, exchequer and IT services in Norwich and intends to bring all staff
back 'in-house' from the end of the year, pending a further review at a later
date. Consultation with staff has begun.


With their professional advisors, the County Council and Capita are now in the
process of agreeing between them the details of the contract closure arrangements. 
This will include payment to Capita of entitlements under the terms of the contract.

Alison King, leader of Norfolk County Council, said:

'This decision has not been taken lightly. However, time has moved on since the
contract was signed back in 1999 and our needs and priorities as an organisation
have changed. There is a strong commitment on both sides to manage the end of
the contract smoothly. We remain committed to making sure our e-service
programme is delivered in full.

'I am confident that this is the right decision for Norfolk and we will
continue, as an authority, to deliver all services through a mixed economy
approach that includes a range of successful partnerships with the private and
public sectors.

'We are keen to ensure that the transfer of staff and services back to the
County Council goes smoothly when the contract finishes. We value the work of
Capita staff based at Charles House in Norwich and they should not be worried
that their jobs are under threat.'

Capita Executive Chairman, Rod Aldridge, said: 'It is clearly disappointing
that Norfolk County Council has chosen to end this contract at this time,
despite the extremely successful performance of our core contract and the
services we provide locally. We hope they can match this success in the future
and wish them well. In the meantime, Capita is delivering efficient services in
partnership with many councils across the country, passing on economies of scale
that allow more public money to be spent on the people who need it most.'


ENDS


For Further Information:

Capita Press Office - 0870 2400 488

Finsbury - 020 7251 3801
Morgan Bone
Mark Harris

Norfolk County Council political contacts:

Alison King, Leader of the Council and the Conservative Group
Tel [phone]

Celia Cameron, Leader of the Labour Group
Tel [phone]

Barbara Hacker, Leader of the Liberal Democrat Group
Tel [phone]

Tim Byles, Chief Executive [phone]

Joanna Hannam, Head of Communications, Norfolk County Council, 
[phone] or email [e-mail]

Mark Langlands, Media and Public Affairs Manager, on 01603 222973, 
email [e-mail]

Norfolk County Council communications team out of hours mobile: [phone].





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