Wednesday, 19 November 2008

More woes (and a little ray of sunshine) for Liberata

(By Anthony Miller) According to BBC reports this morning, the government is to appoint a new contractor to replace Liberata to take over the administration of the Education Maintenance Allowance (EMA). The Learning and Skills Council awarded Liberata a £75m, six-year deal just 16 months ago to run the Learner Support Programme, which includes a number of financial support initiatives including the troubled EMA. Liberata issued a press release in September acknowledging problems with the EMA, but this failed to head off questions in Parliament on 30th October. The BBC suggested that the change of supplier is imminent. The news comes just a day after a report in ComputerWorld that a mooted £300m contract with Sandwell Metropolitan Borough Council, awarded early last year to Liberata and BT, has been extended. This will give a small grain of comfort to Liberata, which lost a flagship deal at Sheffield City Council to Capita a few days ago (see From small acorns ...).

It seems so hard to see a way through for Liberata to survive as an independent player, especially since selling its Life and Pensions business – one of the fastest growing BPO segments – to HCL back in July. The ultimate irony, if so it may be called, is that Liberata shares the same roots as Capita; both were spin-offs from the UK’s Chartered Institute of Public Finance and Accountancy (CIPFA) – as was ICL’s (now Fujitsu Services) original IT outsourcing business, the erstwhile CFM. But from these three acorns, only one mighty oak tree grew. The failure of the other ‘seedlings’ to flourish in the very fertile soil of the UK BPO market cannot be due to lack of opportunity.

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