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Capita Lands £325m Scottish SWAN Deal

Capita has been awarded a nine-year, £325m framework contract to deliver the Scottish Wide Area Network (SWAN), a single public services network (PSN) for the use of all public service organizations within Scotland. Capita will be delivering the services in partnership with Updata.

Around £110m of Capita's revenues will come from four clients that have already signed up to the framework for seven years. These four initial clients, which together represent 30 public bodies are:

  • NHS Scotland
  • Education Scotland
  • Pathfinder North (5 local authorities)
  • Pathfinder South (2 local authorities)

A further 11 organizations are planning to join in 2014, following final discussions.

This important win for Capita builds its presence in the Scottish public sector, currently restricted to its one-stop travel booking contract for the Scottish Government that came through the acquisition of Expotel in 2012.

Over the years, Capita has made a number of acquisitions to enhance its IT services arms. The acquisition that is most relevant to this deal is that of Carillion IT Services Ltd (CITS) for £36m in 2009. CITS brought Capita capabilities in Scotland and added scale to its operations. At the time, CITS had ~440 personnel, including 190 in Scotland. Capita can also tap into capabilities that came with  Synetrix, acquired for £75m in cash, also in 2009. These include the design and deployment of converged networks, hosted application solutions, managed security solutions and software platforms.

Capita and Updata beat competition from a joint Cable & Wireless and Virgin Media Business bid, and another by BT to win this contract. BT, which already supplies networking via N3 national communications network to NHS in Scotland, is less than happy about the outcome. It recently took NHS National Services Scotland (NHS NSS), which led the procurement on behalf of a consortium, to court for an allegedly flawed tender process. Media reports also suggest that BT may be suing NSS for £20m in damages.

SWAN has come out of the recommendations of the Scottish Government's McClelland Report and Scotland's national digital public services strategy Scotland's Digital Future: Delivery of Public Services. It should help the Scottish public sector achieve digital services, collaborate more and share data where necessary.

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