Capita wins new BBC TV licensing contract

Outsourcing firm Capita is to handle the BBC’s TV licensing collection and administration for another eight years.

The proposed deal, which is due to come into force in July, is expected to be worth some £560 million to Capita but will also generate savings of more than £220m for the BBC over the contract.

Zarin Patel, BBC chief financial officer, said: “Capita’s bid was the best both in terms of innovation and efficiencies and so offered best value for money.”

The firm took over management of TV licensing from the Post Office in 2002, with about 1,200 people employed on the contract, including in Bristol and a customer service centre in Darwen, Lancashire.

As well as reducing the rate of evasion, Capita has focused on increasing sales and the proportion of direct debit customers.

Yesterday’s agreement, which is subject to confirmation, replaces existing contracts held by Capita and iQor, which runs cash-related payment schemes.

Capita, which also provides a criminal records service for the Home Office, said it will use new technology and analytics to increase revenues and reduce costs, including through improvements to the TV licensing website.

Chief executive Paul Pindar said: “Through our current contract we have consistently delivered real value to the BBC, helping to drive down evasion and increase revenues collected. We now have an opportunity to build on these achievements.”