It’s not always their fault, but UK outsourcing giant Capita, just has got a way of being at the centre of controversy. There was a flagship blogpost on the company – dubbed “Crapita” by UK satirical magazine Private Eye – when it was selected by NAMA to oversee the management of smaller-value NAMA loans which are still being administered by about 400 staff in the five NAMAed banks. This week, we found out that Capita has so far been paid €299,981.30 to “administer” the approval of 14 loans with an overall value of €1.5m, or an average of €107,000 each, under the SME loan guarantee scheme launched by Minister for Jobs, Enterprise and Innovation Richard Bruton on 24th October 2012.
Hopefully the performance of contract with Capita will improve as the scheme progresses, it is supposed to be processing 1,875 loans per year or 625 every four months compared with the 14 actually processed since the long-awaited scheme launched. But Capita just has a habit of attracting contracts which make the taxpayer look like a bunch of clowns.
The cost and performance of Capita were revealed in a parliamentary questions tabled by the Sinn Fein finance spokesperson Pearse Doherty to Minister Bruton this week. These are the full questions and responses.
Deputy Pearse Doherty: To ask the Minister for Jobs, Enterprise and Innovation further to the announcement of the loan guarantee scheme for small and medium enterprises in the Budget 2012 announcements in December 2011, the total amount of fees paid and payable to a company (details supplied) for administering the scheme to date.
Minister for Jobs, Enterprise and Innovation, Richard Bruton: Following a competitive tendering process, Capita Asset Services (Ireland) Limited was selected to operate the Credit Guarantee Scheme under the Credit Guarantee Act 2012.
The agreed charges under the terms of the contract are €199,000 plus VAT based on 1,875 loans per year for each of years 1 to 3. There is provision in the contract for revision of costs in years 2 and 3 depending on the uptake of the Scheme. The cost of the Scheme will be partially offset by receipts from the 2% premium paid by borrowers.
The Scheme went live on the 24th October 2012, and so far a total of €299,981.30 including VAT has been paid to the operator. This payment includes additional charges in respect of initial set up and implementation costs and charges in respect of training and lender accreditation costs and for the day to day running of the first quarter of the Scheme, for three lenders.
Deputy Pearse Doherty: To ask the Minister for Jobs, Enterprise and Innovation further to the announcement of the loan guarantee scheme for small and medium enterprises in the Budget 2012 announcements in December 2011, the total amount that has been to date extended to SMEs under the scheme and the number of SMEs to which that total relates.
Minister for Jobs, Enterprise and Innovation, Richard Bruton: The Credit Guarantee Scheme is operational since 24th October 2012. There are currently 14 approved guaranteed loans resulting in €1.5m of additional lending being provided to viable companies as of close of business on 15th February 2013. As a result of the sanctioned lending it is expected that there will be 113 new jobs created and 19 jobs will be maintained.
The scheme has been designed to address market failure affecting certain SMEs on the margins of commercial lending decisions, who, because of a lack of collateral or because of the sector they operate in, face difficulties in accessing traditional bank credit.
The Department and the Operator are in regular contact with the participating banks to improve take-up of the scheme, however, the Deputy will be aware that the Scheme is demand- led. Potential borrowers are being advised to contact the participating banks directly. The Department will of course keep a close eye on developments in respect of the scheme as matters unfold.
