OFT to investigate £75m 'creamed' from school's IT

Capita's rival complains that children services arm is overcharging schools by £75m

School's being overcharged by £75 million says Capita rival Bromcom

Outsourcing firm Capita has been accused by rivals of overcharging schools for software and services to the tune of £75m.

Rival schools software provider Bromcom has said in a statement to the Office of Fair Trading (OFT) that £75m had been creamed from schools as a result of Capita Children's Services' anti-competitive practices.

In the statement Bromcom argued that Capita had been behaving this way for 10 years, and set out several complaints against the company.

It said: "software maintenance charges have been inflated to cover Capita's costs of developing new software modules, which are then purportedly offered to schools ‘free of charge’."

Other complaints were that Capita has bundled software products which could and should be sold separately, and that Capita's pricing strategies tended to exclude competitors.

Rebutting the complaints Capita released a statement which said: "Capita Children's Services has already, through its solicitors, robustly rebutted the unfounded allegations made by Bromcom and we have had no contact from the OFT whatsoever with respect to this matter."

To resolve the matter, Bromcom wants the OFT to investigate whether Capita is acting in an anti-competitive way. If the body finds this is the case, Bromcom will call for an urgent decision to ensure Capita stops these activities.

The Bromcom statement also said that if the complaint is upheld then overcharges should be returned to schools.