The Connexions Card administered by Capita will be killed off by early 2007 according to an announcement last month by the Minister for Children, Young People and Families, Beverley Hughes. The initial concept was that the card would generate enthusiasm among young people to remain in education by offering rewards such as discounts at Blockbuster, TopShop and National Express.
Using loyalty marketing to try and improve educational engagement (some might call it bribery) was neither a unique idea nor in retrospect a very smart one. For Capita it was probably a very profitable programme with the seven-year contract (issued in 2001) worth £100m.
Before the announcement Capita are thought to have received £66m and are currently negotiating with the DfES about how much they will receive of the remaining £34m for the contract’s early termination.
The results on the ground were described as negligible at best, and probably a gigantic waste of money at worst, by one person we spoke to. According to research commissioned by DfES, less than 4% of 16-19 year olds had used the card. Users will have until August to keep accruing points and until the end of February 2007 to redeem them. The original target for the scheme was to have 1.7m card holders. To 2004 less than 600,000 cards had been issued and less than 60,000 students had actually had used it, a usage rate of just 3.5%. How much this would translate to per user over the life of the programme is impossible to calculate but it would be well outside the realm of any consumer loyalty marketing program undertaken in the UK.
With the likelihood that education spending will be far more restrained over the next few years, the opportunity cost of squandering this vast amount is hard to estimate. But if it had been invested in resources for students and teachers, increased teacher numbers and new schools, the impact would have been far greater and sustainable.
While it is unfair to blame the failure on Capita, it is unfortunate that they were also responsible for the ill-fated Individual Learning Accounts. The problem seems to be that when major projects like this are undertaken, if they appear to be non-performing, the government takes far too long to kill them off. Almost four years ago the government were warned the programme was not working and yet it has taken until now for them to bite the bullet. Perhaps £65m seems an acceptable political price to pay, but we doubt many private sector firms could afford such largesse with their shareholders’ funds.
While Capita negotiate their termination fee with the DfES’s lawyers, 60 staff who work exclusively on the Connexions Card may soon find themselves redundant or possibly redeployed to other areas within Capita, who employ over 1000 people in the North-East of England.
www.capita.co.uk
www.connexions.gov.uk
