OUTSOURCING firm Capita plans to create jobs in Yorkshire, it was confirmed last night.
The Capita Financial Group (CFG) is starting consultations over redundancies at its London office as it prepare to increase staffing levels in Leeds.
CFG already employs 221 staff at its offices in City West in Leeds.
Although Capita could not confirm how many jobs will be created, Leeds Financial Services Initiative (LFSI) said the announcement showed that the company acknowledged the strength of Yorkshire's economy.
A spokesman for the Capita Group told the Yorkshire Post: "We have told staff that we will be entering into consultation with them over CFG's long-established plans for re-organisation – which includes plans to primarily base its UK collectives service offering from its existing Leeds office, with support from existing CFG operations in Mumbai, India.
"As a result of this strategic decision, several of the departments...were, earlier this week, informed that the number of roles based in London will be reduced over the coming months. Due to the number of possible redundancies, we will be required to consult for a minimum of 30 days.
"We won't know how many jobs it will create in Yorkshire until the consultation is complete."
Howard Kew, the chief executive of the Leeds Financial Services Initiative, said he appreciated that this was a difficult time for the London-based staff affected by Capita's decision. He added: "We are pleased that the company has recognised the strength and capability of our region. We are helping that transitional process."
Capita has 3,800 staff in Yorkshire, including around 2,000 in Sheffield, who work in areas such as coal health claims, and education resourcing. The company is Sheffield City Council's outsourcing partner.
It also has staff in Bradford, who are employed in insurance and legal services, and operations in Huddersfield, Wetherby and York.
Capita has been benefiting from a growing trend towards outsourcing in Britain as the Government looks to cut costs and companies seek to improve their profitability.
In the first six months of 2009, Capita secured 10 major contracts with a total value of 814m.
These include agreements with AXA Sun Life to administer 3.2 million life and pensions policies. The contract, worth 523m over 15 years, started on June 1 with 1,150 employees in the UK transferring to Capita.
Capita has also signed a contract with the Learning and Skills Council (LSC) – to manage the administration of a range of allowances to support learners, including the Education Maintenance Allowance (EMA) and the Adult Learning Grant (ALG). The contract is worth 68m over four years with an option to extend for a further two years.
This followed an announcement in November 2008 that Capita was to take over the service with immediate effect.
In the six months ended June 30 2009, Capita Group's turnover increased by 11 per cent to 1.31bn and underlying operating profit rose by 14 per cent to 159.6m.
In a statement to accompany the half year results, Capita said it was seeing "high levels of interest" in both the public and private sectors.
Capita said there was "considerable potential" for private organisations to play a role in helping to find the 13bn of efficiency savings identified in the Government's Operational Efficiency Programme.
LEADERS GIVE THEIR BACKING
Yorkshire's business leaders last night praised Capita for its decision to choose Leeds as the main base for the Capita Financial Group's collectives service.
Gary Williamson, chief executive of the Leeds, York and North Yorkshire Chamber of Commerce said: "Capita's announcement is fantastic news for our region and its move to Leeds will be of benefit to our local economy.
"It will also be great news for those unfortunate enough to have lost their jobs as a result of the recession because it is a clear demonstration that there will be real opportunities for them in this great city."
Tom Riordan, the chief executive of Yorkshire Forward, said: "The potential increased presence of an industry giant such as Capita here in Leeds is great news, not just for the industry but the region's economic progress as a whole."