Capita has been accused of overcharging schools for software to the tune of £75.4 million over ten years.
The allegations have been made by rival school software provider, Bromcom, which has filed a complaint with the Office of Fair Trading alleging “anti-competitive practices. Capita strongly refutes the allegations.
Bromcom is claiming that Capita has an effective monopoly on some software applications in schools, citing Capita as claiming that its products are in 2700 out of 3300 schools in the country.
It accuses Capita of:
- “Charging annual software maintenance charges to schools which are inflated in order to cover Capita’s costs of developing new software modules, which are then purportedly offered to schools ‘free of charge’;
- Tying and bundling together software products which can and should be sold separately;
- Pricing strategies which tend to exclude competitors from Capita’s entrenched position;
- An inadequate supply of interface facilities and interoperability”
In response, Capita said, "Capita Children's Services has already, through its solicitors, robustly rebutted the unfounded allegations made by Bromcom. We have served the education market for a number of years and grown our business through supplying innovative products to meet the changing needs of the market, maintaining good client relationships and working successfully with other suppliers."
Bromcom’s believes Capita’s maintenance charges to schools may be inflated by 25%. For a typical secondary school, this is an “overcharge of £2,000 per year,” Bromcom claims.
If the OFT launches and investigation and find a against Capita, Bromcom wants the alleged overcharges to be returned to schools.
In addition, it wants maintenance charges reduced and the unbundling of contracts so that individual elements are charged at stand alone prices.
Bromcom is also calling on Capita to “offer real and effective interoperability so the software of different suppliers to schools work well together. One solution would be for Capita to embrace the open standards of the Systems Interoperability Framework and to have a technically knowledgeable umpire/arbitrator with power to deal swiftly with interoperability issues promptly as soon as they arise.”