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Capita council deal sparks locals' undercutting fears

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Private practitioners in Cumbria are bracing themselves for a wave of fresh competition from Cardiff-based outsourcing specialist Capita, which took over Cumbria County Council architects' department last week.

Capita, which was among the top 10 fastest growing practices in the UK last year, paid £4 million for the department, which has 60 architectural staff, as part of a 500-strong multidisciplinary operation. It is the first time Capita has won a contract to take over an entire local authority architects' department. Traditionally the bulk of the company's business has stemmed from contracts in areas such as payroll management.

Signs at offices in Carlisle and Lancaster were changed last week and the deal guarantees Capita local authority work for seven years. It has led to fears among some architects in Carlisle that the new firm, called Capita Design & Business Services, will undercut them on private work.

'It has an unfair advantage over private practices and, with Capita behind it, it will be able to choose the level of fee it wants to work at, ' said Johnston & Wright director, Alistair McGregor.

'Our concern will be that it undercuts us.'

The council had smashed through the 20 per cent ceiling on private work placed on it by regulators and more than half of its work was in the private sector. Private practices contacted by the AJsaid they thought the council department routinely bid around one fifth less than their private sector competitors. 'The fee bids they were making were ridiculously low, ' said Architects Plus partner, Raymond Whittaker. 'You always questioned their overheads and they seemed to be cushioned.'

In Cardiff, Capita's director of architecture Andrew Murray claimed there would be little overlap between the local practices and Capita's operation. 'The smaller works in Carlisle will not be the sort of projects we will be targeting, ' he said.

The department was forced into Capita's arms by regulators who demanded it either cut back its private sector work or privatise.

In response to the buyout, director of architecture of Hampshire County Council's architecture department Steve Clow defended public architects' departments. 'We staunchly hold on to the fact that the best way is to remain an in-house service, ' he said. 'It's all about the ability to stay close to the client - in our case the council members.'

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