The Chamberlain News

Capita set to pocket £500,000 from Birmingham City Council for job ‘no one else can do’

Birmingham City Council is set to pay outsourcing company Capita £500,000 to oversee a major research project into the future of schools, Chamberlain News can exclusively reveal.

An Education Services Transformation Programme will examine how to deliver services against a backdrop of public spending cuts and the rapid growth of independent academies.

A proposal to involve Capita, which already has £1 billion worth of contracts to oversee ICT services, is bound to infuriate Labour backbench councillors who have accused the company of making excessive profits from its existing links with the council.

A discussion document launched by the council children’s services strategic director, Peter Hay, sets out a six-stage approach to “transform” the way education is delivered in Birmingham and is expected to be approved by the cabinet on December 16.

Mr Hay defended the proposed use of Capita, insisting that the company had experts capable of doing the job and that the council does not. He pointed to research carried out by Capita into the future of adult social care, adding that the council could not have produced work to such a high standard.

He added: “I am very clear. The skills Capita bring are of a calibre that we don’t have, nor should we have, for a short term piece of work.”

Mr Hay’s comments failed to impress Conservative education spokesman Cllr James Bird: “At a time when education services need to demonstrate robustness, it appears that Labour is taking faith in a company it has criticised for making vast profits consistently for the past few months.

“It’s quite a U-turn, which presumably most of them are choking on. I’m absolutely explicit that any contract should demonstrate outcomes that benefit the child substantially. Children are the priority and it must be demonstrated that this is the case”.

The project is part of a wider review of children’s services ordered by Schools Minister Edward Timpson. It will feed into an improvement plan to be presented to Professor Julian le Grand who has been appointed to advise on whether attempts to turn around Birmingham’s failing children’s social services are working.

Crucially, the programme will try to broker a deal between the local authority and head teachers about the way in which the Dedicated Schools Grant should be divided and how much of it the council should retain to fulfil its statutory duties.

It will also examine how the council can cope with the soaring cost of looking after children with disabilities and learning difficulties.

The future of £145 million worth of non-statutory services, including early years’ provision, childcare, some home to school transport services, outdoor learning and business support to schools, will also be under the microscope.

The document describes the context that will shape the programme’s work:

• The changing balance of spending power from the council to schools through the Direct Schools Grant.
• The increasing number of academies and free schools in Birmingham and the corresponding reduction in future funding for the council.
• The budget pressure that the council is facing and the need to secure a further £340 million of savings by 2016-17.

The discussion paper calls for “meaningful and iterative” dialogue with heads and governors and says that the voices of children and young people must be heard “particularly in communities where outputs are poorer”.

It continues: “The scale of the challenge and the complex balance of resources and responsibilities mean that a whole system transformation is necessary.

“It will be essential to develop a whole system picture of as-is including activity, associated costs outcomes/attainment in order to provide clarity on the starting point and build stakeholder commitment to addressing the problem.

“The programme team will bring all of the individual cases together in order to fully understand the dependencies, contradictions, duplications and synergies in order to form a single, integrated model for the future of education services to schools.

“This will be used to articulate a future operating model and associated operational change. The whole model will be further tested with stakeholders.”

There are six stages to the programme, which is expected to report recommendations by June 2014.

The council will pay £500,000 to support the programme through Capita, The Children’s Society and BCC Business Change.

Capita has contracts worth more than £1 billion with the council, chiefly through ICT joint venture Service Birmingham. Officials are currently renegotiating the £120 million annual cost to the council of Service Birmingham and hope to reduce the bill by about £40 million.

The company has in recent years carried out a number of other projects for the council including work on the new library and research into the future of adult social care.

Capita “will ensure that all stakeholders are engaged, deliverables at each stage of the process are sound and the individual cases are synthesised into a coherent overall solution”, according to the education transformation programme document.

Capita has agreed that a “robust ethical wall” be put in place to make sure that information gained in supporting the education transformation programme is not leaked to another part of their business, the document notes.

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