SO WHO WILL BENEFIT?

But the company's track record in other parts of the country shows why there is growing opposition to plans to hand over control to a private company.

Capita, which until recently employed council leader Lord Bassam as a consultant, has come under fire for its service.

Brighton and Hove Council is currently negotiating with Lewes, Tandridge, and Wealden councils on plans for a centralised benefits and revenue service based at the old Southern Water building in Falmer.

The idea is for a central call centre to deal with all queries concerning housing benefit and council tax payments, although it is expected local query points will be set up for residents unable to travel to Falmer.

The council believes the project will deliver a more cost-effective service and higher levels of customer care as well as create new jobs.

But Capita-run services in other local authorities had been the subject of fierce criticism in the past.

Benefit inspectors sent in to investigate Broxbourne Council, Herts, in March last year discovered Capita had been exaggerating its performance.

An audit by the Benefit Fraud Inspectorate revealed Capita had been claiming a 99 per cent success rate in achieving a minimum 14-day turnover between claim and assessment.

However the audit found actual attainment was 46 per cent and that too much time was taken dealing with queries and making payments.

The DSS report, published last month, said: "There's a major disparity between Broxbourne's reported performance and the performance indicated by sample analysis. This disparity raises a number of concerns, whether the date supporting the reported statistics is incorrect or wrongly calculated."

The inspectorate's report, published last month, uncovered alarming delays, poor service methods, and an exaggerated performance rate.

Among their findings were:

Out of 100 sample cases four files could not be found, five cases could not be reconciled with Broxbourne, and only 37 cases showed evidence that the 14-day clear-up target had been achieved.

A major discrepancy between reported performance and that uncovered by sample analysis.

Concerns about the length of time between the date a claim was made and when a claimant first received benefit. Out of 59 cases examined nearly half could not be properly interpreted because of poor file management while 15 cases showed benefit cheques took more than one month to arrive.

No formal contingency plan in place for dealing with backlogs of assessment work.

No established procedure for dealing with people who reported their complaint had not been dealt with in a satisfactory manner.

Out of 52 sample cases the identity of the claimant had not been verified in 40 of them,and in 35 cases residency had not been checked.

In Lambeth last year the Labour administration was forced to hire a firm of troubleshooters to tackle ongoing problems involving delayed and incorrect benefit payments after Capita had taken over the service.

The council set Capita tough targets which had still not been met six months after it was appointed.

In one example, 4,600 elderly people were mistakenly sent letters informing them their housing benefits were being cut along with an increased council tax demand.

Ten months after Capita had taken over, the council was forced to set up an action plan and warned the company any further failures would be punished by defaults and financial penalties.

In Rutland, Capita lost its contract with the local authority because its services were costing more than an alternative in-house bid.

When the contract was put out to tender in June last year Capita was dropped in favour of the in-house package and lost the service it had been running.

Brighton and Hove Council pays out around £100 million in housing and council tax benefits every year to around 27,000 claimants.

Capita chief executive Paul Pindar vigorously defended his company's record and pointed out many of council services were in a poor state at the time they were taken over by Capita.

He said: "I think in just about every single case the situation is better than the one we inherited. In Lambeth we inherited 100,000 items of correspondence and a staff that could neither read nor write. You can't put things like that right in one day."

He said in Brighton Capita was committed to raising the level of customer service and increasing efficiency while maintaining staff levels.

Mr Pindar added: "Our aim on any site is to use it as a vehicle for development and growth, not to go in and make wholesale redundancies. There's nothing to fear from Capita. We are highly regarded within both local and central government. Many people regard us as a success story."

But Andy Richards, Unison convenor in revenue and benefits, is leading the campaign against Capita.

He said: "We are very concerned about our future as employees under Capita, which has a track record for downsizing. We are also worried about what will happen to the quality of the service itself."

If the new deal goes ahead it would be Capita's biggest ever contract.

Mr Richards said there was unease about Lord Bassam's long standing links with Capita despite his resignation as a company consultant two months ago.

Mr Richards added: "There has to be a question mark over a possible conflict of interest."

A spokesman for Lord Bassam said the council leader was aware his links with Capita might draw criticism and immediately took appropriate action.

He added: "Lord Bassam was aware people might say there was a conflict. When it looked like the private sector could eventually become involved the first thing he did was get out of the discussion process and resigned from the joint board."

He subsequently resigned from Capita in February and took no part in discussions concerning the selection of a contractor. Last Thursday Unison wrote to every councillor expressing its concerns about bringing in a private company.

Members distributed leaflets outside council buildings to demonstrate its strength of feeling.

Members in the finance department have already voted unanimously for a ballot on industrial action to defeat the proposal.

Brighton and Hove Green Party have also called for united opposition to the plans.

Green party candidate Keith Taylor said: "In our view this decision is being forced on the town, and this issue is simply too important to be rushed - we need to have all the facts."

A spokesman for Brighton and Hove Council said: "This proposal is still in the early stages. If Capita appears to be the right company for the job we will thoroughly check out its contracts.

"We would also seek to have a large element of control. A new company would be formed which would be half owned by the council and half by the private sector.

"We would seek to ensure half the members of the board were council representatives and we would also want a veto on any matters affecting staff terms and conditions."

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