Council cancels £48m IT contract with Capita

20 June 2001
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21 June 2001 | Robin Parker

The public-private partnership scheme has suffered a huge blow with the collapse of a major contract between IT services supplier Capita and Lambeth council.

The council terminated the housing benefit element of a £48 million support services contract halfway through its seven-year duration. Lambeth will take the service back in-house from July.

Capita will continue to supply its IT service, on which a large amount of the council's data is stored, and a call centre.

The IT group demanded £10.3 million a year - more than double its previous fee a for the remaining three and a half years of its contract. By taking back the service internally, the council expects costs to fall after the initial outlay.

Problems in Lambeth's housing and council tax benefit administration will be addressed by a Benefit Fraud Inspectorate report, to be published next month.

SMjun2001

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