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Barnet Council 'rescued' by Capita after 2e2 demise

Pre-empting £320m outsourcing deal?

Capita is providing emergency IT support to Barnet Council in London after the demise of data centre hosting and IT services group 2e2.

2e2 recently went into administration, leaving companies with the prospect of having their websites being shut down and their corporate data becoming inaccessible through the end of service provision.

Capita is already the preferred bidder for a major £320m IT/business processing deal at Barnet after winning out against BT, although this contract is the subject of a judicial review at the Royal Courts of Justice.

According to a report in The Times Capita is getting £72,000 a month to keep the lights on at Barnet, compared to the £69,000 a month contract the council had with 2e2, which effectively pulled the plug on its customers last month.

Analyst TechMarketView said, "2e2's demise would have left Barnet high and dry were it not for Capita stepping to the breach. So this is clearly good news for the council.

"The big question in our minds is how many more of these 2e2 contracts are out there, and most concerningly, where does it leave 2e2's very small customers, which are unlikely to attract this kind of interest from suppliers?"

Earlier this month IT services firm Logicalis said it was acquiring the four European subsidiaries of 2e2 for 24 million (£20.7 million).

Daisy Group was also appointed by Oakley Capital Private Equity to manage the failed 2e2 data centre business which was separately acquired after administration.

As part of Logicalis' purchase, approximately 70 people from the defunct 2e2 UK operation have been taken on and the company said it had "assumed some of its respective business".

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