Consignia loses BBC licence-fee contrac
Consignia’s problems were compounded yesterday after it lost a Pounds 500m contract to collect the television licence fee on behalf of the BBC.
The broadcaster, which has used Consignia – formerly the Post Office – since its inception more than 75 years ago, has selected Capita, the support services group, as its preferred supplier. The BBC put the licence-fee contract out to tender in April after becoming dissatisfied with the Consignia-backed service.
Consignia, which earlier this week said it might cut up to 30,000 jobs to meet cost-saving targets of Pounds 1.2bn by April 2003, repitched for the contract but was “deselected” in August. “Anyone who got through (to a second round) did so on merit,” said the BBC.
Consignia put a brave face on the loss, insisting it would have a relatively small impact on its otherwise strained finances. “The BBC’s aspirations, particularly in the area of marketing and brand management, did not really match our capabilities,” it said.
However, the postal group was boosted last night as talks to repair its relationship with trade unions appeared to be progressing well. Both sides said they were “cautiously optimistic” but the question of how many redundancies would be required was not thought to have been resolved yet.
Losing the BBC contract, which is not thought to have been producing substantial profits, may even help Consignia reach targets to reduce its 200,000 workforce.
Most of the 1,500 Consignia staff working in call centres or driving detector vans will move over to Capita in July. A further 230 jobs will be created at a new call centre in Blackburn.
The 10-year BBC contract involves collecting the licence fee from 23m homes, pursuing evaders, providing information technology and back-office services and staffing call centres.
Consignia will still be involved in a small part of the collection process through its network of 19,000 post offices where people can buy their licences.
Abbott Mead Vickers, the advertising agency, was selected to run the marketing campaign.
Consignia was part of a consortium that included WPP, the communications group, and Bull Information Systems, the technology group. A contract awarded in 1998 was terminated in March because the consortium “failed to meet key deliverables”.
Greg Dyke, BBC director-general, wants to reduce collection costs to spend more on the schedule. As part of the settlement with the government over its future funding, the BBC agreed to find an extra Pounds 200m a year until 2006 for programming. It is estimated that the Capita contract would save the BBC about Pounds 10m a year. Additional reporting by Christopher Adams
