Taps running dry for Capita? Southern Water pens 5-year managed service

Phew! Water shortage scare not so, er, scary now it is?

The water wells across parts of England* may be running dry but Southern Water has kept the taps running on its long running managed service deal with Capita, extending the contacts initially by five years for £30m.

The renewal was confirmed to the London Stock Exchange today by shape shifting Capita, a company that lost £515m in 2017 and is onto its third CEO in four years, with the latest boss offloading non-core business units.

The contract, which runs for half a decade with an option to extend it by a further three years, adds to the front-office operation services already provided by including back office billing processes, correspondence handling and pint and mail.

Southern Water has consolidated the suppliers to one Capita, and it expects to “improve customer experience and increase customer self-service through the use of repeatable solutions across insight, analytics and automation.”

John Lewis is the latest CEO at Capita following the retirement of Paul Pinder in 2014 following a 25-year reign of terror and his less than successful successor Andy Parker, who left last summer after being unable to steer the company to better fortunes.

In a canned statement, Lewis said:

This expanded partnership with Southern Water demonstrates Capita’s expertise in transforming customer experience across all channels. It also reflects our track record of supporting blue-chip clients in highly-regulated sectors such as utilities and financial services.

Capita has signed a number of sizeable deals with customers this year, including one with the Beeb, the Standards and Testing Agency, an extension with Npower and Marks & Spencers, and an agreements with the Financial Services Compensation Scheme.

A number of problem contracts have also been worked through, including Transport for London and Co-Op Bank, but only this week Capita faced criticism over a bug found in its Schools Information Management System used by 21,000 UK schools.

So far this year, Lewis has sold its Supplier Assessments business for £160m, the Specialist Insurance Services business for £16m, Projen for £2.75m and Medicals Direct Group for £2.7m.

Lewis previously branded Capita as a "collection of contracts" inherited by multiple acquisitions over the years. He is trying to bring some order to what is perhaps perceived as a chaotic business. ®

* Britain has been gripped by a heatwave for weeks, and parts of the island including Manchester have initiated a hose pipe ban. In the case of Manchester, a fire on Saddleworth Moors raged for three weeks and it took a lot of water to put it out.

According to the Environment Agency, England specifically is facing a water supply shortage by 2050 without a plan to curb water usage and wastage. Enough water to quench the thirst, etc, of 20 million people is lost each day through leakages, it added. Both Scottish Water and Welsh Water have asked people to be more mindful of their water usage.

It is reassuring that Capita is on hand to help Southern Water do its bit.

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