An entrepreneur with soul

1 March 2008

Publication: Guardian Public Magazine

When Capita founder Rod Aldridge got caught up in the Labour loans scandal he immediately resigned, but it was time to go, he tells Polly Toynbee

The man should be bitter and angry. The injustice of what happened to Rod Aldridge seems even greater now, looking back on those disastrous events a year and a half later. But no, he is not burning with resentment. On the contrary, he says the cataclysm did him a favour, shook up his life, propelled him out of old ruts and sent him off on a new path.

Here is a man who founded his own company from scratch back in 1984. Under his leadership, his Capita group grew to become a FTSE 100 company, employing 27,000 people, with profits reaching £200m by 2006. One of his greatest achievements was delivering the congestion charge system for London without a hitch, when everyone everywhere predicted it would be an administrative calamity. But then the unexpected blow fell. As a lifelong Labour supporter – his father was a branch secretary of the Sheet Metal Workers union – he had lent Labour £1m for the 2005 election, in effect later viewed as a donation that Labour chose to keep secret. When all these loans that circumnavigated Labour’s own new laws on donations were revealed, what seemed like an act of solidarity with his old party suddenly looked ominous. Was Capita trying to curry favour with the government to secure yet more state contracts? For fear the company would be seriously damaged and might find government contracts harder to win following the revelation, he stood down as chairman of the company he had himself built, and walked away.

He remains an important shareholder, but has lost control of his own life’s work. But he shrugs philosophically and says he made a foolish mistake, never realising how his loan might seem – and if it still hurts, he doesn’t show it. “Entrepreneurs never get the timing of their leaving right” he says. Though it wasn’t his choice, he feels that after 22 years at Capita, it was time to go.

An 11-plus reject, he went to a secondary modern and left after getting five O’levels, not good enough results to get him into probation officer training. So instead he went into a local government accounts department back office, which hardly sounds like the springboard for entrepreneurialism, but it gave him the training and the accountancy exams he says no private company would have given him – “And I had energy and drive”.

More than that, he was the right man in the right place at the right time. By the time the Thatcher government arrived, bent on contracting out council and government services, Aldridge had moved from local council work to become technical director at the Chartered Institute of Public Finance and Accountancy, with an overview of the sector. He founded Capita with a management buyout of one arm of Cipfa, ready to exploit the new political opportunity that was opening up. He became known, not always warmly, as “Mr Outsourcing”. Where other companies were bidding for contracts in the manual sector – bins, parks, cleaning and security – Aldridge saw the potential in bidding to take over the back-office work – and it galloped ahead.

But looking back on Capita’s early days, he now regards pure contracting out as crude, where the state put out the contract and washed its hands of it thereafter. “Outsourcing is a bad term, “ he says. Now he advocates partnerships instead. “Local government is way ahead of Whitehall” he says. “They are now braver and more imaginative in making these joint partnership deals.”

Like many who have made their fortune, he devotes most of his time to philanthropy. His Aldridge Foundation develops ideas for social change, He sponsors an academyschool in Darwen that specialises in entrepreneurship, encouraging pupils to set up their own businesses.

At 60 he bristles with projects and plans. He has that impatience of someone with hardearned experience who needs to impart it to others, for fear of next generations endlessly reinventing old wheels. He talks with the urgency of one who can see the administration’s many inefficiencies and itches to put them right.