Some council staff have been expressing concerns around the performance and standards of service provided by Crapita, who manage the council’s IT and phone systems.
The company, which is midway through an eight-year, £73.5million “mega-deal” that was agreed by the previous, Conservative-run administration, saw its share price plunge yesterday after it reported profits down by 28 per cent.
This comes despite Crapita seeking to offshore many of the services it provides for local authorities, such as Croydon, and use instead technicians and programmers based in India.
According to City AM, Crapita’s fall in profits is due to a downturn in new contracts in 2017, a downturn in business attributed to uncertainties related to Brexit.
City AM reported yesterday, “Shares were in freefall this morning, plummeting more than 10 per cent.”
The company has been shedding parts of its business to bring in extra money. Crapita has also been making thousands of UK-based staff redundant, as it tries to reduce its operating costs urgently.
This has seen the company moving many functions to India, which it had previously performed on-site with London councils. Or, as the company said in a report seen by the trade website The Register in March, “there’s an opportunity to reduce the cost of the function by leveraging offshore capability”.
The Crapita report came shortly after the company was forced to issue a profits warning to the London Stock Exchange earlier this year.
“That means tasks maybe be relocated to our Capita India operation,” the company’s internal document continued. “We have identified that should these tasks be relocated it may be likely that we will need to reduce the number of System Support Engineers from 11 to six.”
“In some cases … it is proposed work could be relocated to Capita India, where work can be completed in more cost-effective ways.”
The Register did not identify which borough council the Crapita report referred to, but sources at Fisher’s Folly, Croydon’s council offices, have confirmed that some parts of the company’s services in this borough have been moved halfway around the world. With mixed results.
Crapita’s management of the council’s IT had some shaky beginnings. The Your Croydon website was offline for nearly a fortnight, making it impossible for residents to organise their Council Tax payments, check their council-managed benefits or find out other important pieces of information.
Capita holds contracts with a number of London councils, including a controversial £322million 10-year outsourcing deal with Barnet. Southwark Council has opted to end its association with Crapita and bring staff in-house.
The move of systems engineers to India raises some far-reaching questions about online security and the database operated by Croydon Council, which contains personal details of hundreds of thousands of borough residents. Tech professionals suggest that it is impossible for system engineers to perform their jobs without “super admin” privileges in the back-end of the council’s computer system.
The Register quoted one system engineer, who said, “These are senior engineers who have passed the UK government security clearance vetting process, they are the most highly privileged users on the networks in terms of the databases and systems that hold information about the council’s constituents.”
A spokesperson for Croydon Council told The Register, “Capita has advised us of the proposed changes to their business, but these are not expected to impact on the Croydon service at this time.”
Which reassured… no one.
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