Industry news

After just six months in the job, Eddie Aston has suddenly left. There is no comment from G4S as to why, but Peter Neden has been named as his interim replacement, from his role as Regional President of UK and Ireland. This is the third change at the top in two years for the struggling outsourcing giant.

Renewed call for G4S & Serco to be barred from bidding for future business

HCL Technologies, Indias fourth largest IT services provider, has landed a $500m IT outsourcing contract from PepsiCo. The seven year contract is for their infrastructure management services. TCS & Cognizant were reportedly named as the front runners for the contract which finally went to HCL.

From January to March HCL’s infrastructure services has grown by 5.1%, presumably because of the demand for renewals and rebids.

HCL posts rising quarter profits

The Department for Education (DFE) are working with councils on agreeing to outsource Children Services and Social Care functions. This comes as an attempt to remove unnecessary barriers from frustrated Councils in order to deliver an improved and innovative service. External organizations such as voluntary and community groups already help to deliver current services, using outsourcing to delegate the service seems to be the next step. Staffordshire and the London boroughs of Kingston and Richmond Councils are already keen to outsource some of their Social Care Services.

Councils receive shared service funding boost

Barnet Council dubbed “easyCouncil” after the announcement of the One Barnet programme in 2010, is looking forward to savings of £165 million over 10 years from two controversial outsourcing contracts.

The customer and support group contract with Capita that covers procurement, commercial services and various back office functions is reported to bring future savings of £126 million, with the other £39 million coming from the other contract with Capita covering development and regulatory services in a joint venture model.

After a Court of Appeal ruling in favour of the council following a legal challenge brought by campaigners against the One Barnet programme, the contracts with Capita were signed in August 2013.

Barnet Council Outsourcing: Judge confirms council should have consulted public more

Babcock claims that a surge in outsourcing since the coalition government has been in power has helped increase their pre-tax profits up by 15%. Babcock is one of the MoD’s key suppliers, providing maintenance of Royal Navy nuclear submarines to managing their infrastructure. The MoD is their biggest account and provides nearly fifty percent of revenues, as well as offering future opportunities such as upgrading and privatising their support and maintenance arm which is expected to go out to tender later this year.

Engineering group Babcock secures £800 mil fire service contract

The Bristol based outsourcing company, Mitie (Management Incentive Through Investment Equity), posted a headline pre-tax profit increase of 4.3% to £113.3m while headline operating profit increased 6% to £127.5m.

It was also announced that Mitie had nearly sold the loss-making mechanical and electrical engineering construction business, which made one-off losses of £13.6m in the year to March 31st.

Mitie employs 79,000 people in the UK and provides a variety of outsourcing services to organisations such as Mitchells & Butlers, Network Rail as well as British government and local councils.

Mitie acquires UK home care provider Enara for £110.8 million

The Office for National Statistics (ONS) are moving away from a single supplier and replacing it with SIAM and towers model. The tender is estimated to be worth between £13m - £37m and is to include end user computing, telecommunications and networks. They have created the Procurement of Replacement IT Service Environment (PRISE) to implement the SIAM model. The tender is open to SME’s and bids are to be submitted by 12th June.

MoJ selects Lockheed Martin for £125 million IT contract

arvato has joined up with analyst firm NelsonHall to produce a UK Quarterly Outsourcing Index on the value of deals completed, and Q1 2014 results show the value is significantly on the up, with a 168% increase on Q1 2013 results.

The Index reveals that 39 new contracts worth a total of £2.1bn were agreed in the period, representing a 65% increase on figures from the first quarter of 2013. Three quarters (75%) of the contracts were completely onshore agreements, with all work being delivered in the UK. In more than half (59%) of deals, the services in question were being outsourced for the first time, representing new work for businesses in the sector, rather than contract renewals or work transferring between vendors.

According to the Index, the public sector dominated deal activity accounting for 74% of total spend in the first three months of the year. The local government sector alone saw a 58% year-on-year increase in deal values. In contrast, the value of private sector deals decreased by 20% in the same period.

arvato expands into Philippines

The Driver and Vehicle Standards Agency (DVSA) has announced a tender for their End User Computing (EUC) tower services. They are looking for a single supplier for the £12m contract where the successful bidder will be in charge of installation, maintenance and continued support for their end user devices. This is the second tender the DVSA have announced so far this year to replace current arrangements they have with Capita and Atos which both expire at the end of 2014.

DVLA told to increase digital transformation programme

The London Bullion Market Association (association of banks, fabricators, refiners, shippers and brokers involved in precious metals trading in London) is currently preparing to implement new benchmarking regulations from the international Organisation of Securities Commissions (IOSCO), and is contemplating outsourcing the administration of its gold forward offered rates (GOFO) to a third party.

The IOSCO is a global umbrella group for market regulators and outlined a series of principles after the Libor scandal in 2012 (a series of fraudulent actions connected to the Libor (London Interbank Offered Rate) and also the resulting investigation and reaction) with which any institution providing a financial benchmark should comply.

The LBMA is responsible for GOFO benchmark prices which are globally regarded as the international benchmark for pricing a variety of bullion transactions and products.