Move to quell fears of Prudential staff as 1,000 jobs transferred to management firm

Published on Thursday 29 November 2007 00:06

MANAGERS at Capita moved quickly yesterday to reassure staff in Stirling that they had a future following the decision by Prudential to outsource 1,000 Scottish jobs to the business management company.

Prudential announced yesterday that it was going to outsource 2,000 jobs throughout the UK to Capita as part of a major restructuring and cost-cutting exercise. Half of these jobs are at the Prudential site at Craigforth, Stirling.

Capita operates the back-office functions for a number of pensions companies, but the Prudential deal is the biggest in the company's history. It means Capita will use the Craigforth site as a pensions hub, dealing with the back-office functions for Prudential and a number of other companies from that office block.

For the 1,000 employees affected, the news that Capita was taking over their jobs came as a welcome relief to those who had feared outright redundancy in the Prudential restructuring.

Yesterday, there was a cautious welcome from both unions and local politicians for the news, but some concern that Capita was not able to guarantee the retention of all jobs on the site.

Capita has had a chequered history in taking over back- office functions.

Last year, the takeover of some BBC roles led to a one-day strike after Capita refused to guarantee that workers would have the choice of a BBC contract or redundancy.

Capita was criticised after it took over functions for the Criminal Records Bureau and outsourced work to India.

The records of some individuals, after being assessed to work with children, came back riddled with errors and spelling mistakes, according to police officers.

Last night, a spokeswoman at Capita could not offer any guarantees that all jobs would be safe, but she insisted the firm was committed to keeping 1,000 staff at the site, turning Craigforth into a "centre of excellence".

She said: "We have not announced any redundancies and we cannot tell whether there will be any redundancies at this stage. We are starting a consultation process with staff now. We do guarantee 1,000 seats there, that is not going to shrink."

The spokeswoman added that Capita did not have a record of compulsory redundancies, and stressed that the firm had not made a single employee compulsorily redundant at any of the pensions firms it had taken over.

• PRUDENTIAL'S decision to outsource 2,000 British jobs to Capita is part of a major cost-cutting operation.

Prudential carried out a review, starting in March, in an effort to save 195 million a year within three years.

The company's 15-year deal with Capita is worth 722 million.

The intention is to hit its overall cost-saving target of 195 million per annum by the end of 2010, and reduce unit costs per policy by 32 per cent by 2011.

Last month, third-quarter results for Prudential's UK business performance lagged behind its operations elsewhere in the world.

Domestic sales grew 8 per cent to 523 million in the first nine months - about half the 15 per cent new business growth across the rest of the group.