UK business process leader Capita has secured a £105m with The Pensions Regulator (TPR) to provide direct communications services between TPR and UK employers, as it rolls out the new requirement for automatic pension enrolment from October 2012. The deal with Capita runs for seven years from October 2011, with the option to extend it for a further three years.
Capita take on responsibility for distributing campaign messages to employers, intermediaries and advisers, notifying employers 12 and 3 months ahead of their automatic enrolment duty dates, managing the process for employers to register with the regulator and operating a contact centre for communications services. Capita will also issue fixed penalties for non-compliance on behalf of TPR. The Government’s intention is to introduce the automatic enrolment gradually over the period from 2012 to 2016, which will be a relief for Capita, since this should help avoid it being inundated with requests from day one. Of course, Capita’s India-based rival TCS got the real biggie relating to the UK pensions reforms, taking on administration for the National Employment Savings Trust (NEST) last March, in a deal worth £600m over ten years. This contract is now boosting TCS’ UK growth significantly (see TCS delivers ‘very satisfying’ first quarter).
For Capita meanwhile, this contract is exactly the kind of deal it needs. Firstly, it will be a welcome boost to Capita’s central government BPO division, which, like all of its competitors, has been impacted in the past year or so, by delays and frozen decisions on new contracts. Secondly, it will contribute some much-needed organic revenue growth to the business. And finally, as a true end-to-end BPO the deal will draw on a number of Capita’s capability areas, some of which it has been actively building up in recent months through M&A. For example, it goes some way to validate Capita’s latest acquisitions of UK-based call centre providers Ventura and Vertex private sector (see here; and here). Also Capita’s capability in campaign and message distribution should have been enhanced by its recent acquisition of managed print services provider Right Document Solutions (see here). Communications and marketing is in fact becoming an increasing area of interest for Capita and rivals like Xerox, Serco and HP as both public and private sector customers look to extract cost and drive efficiencies out of these business processes.