The chair of the UK Parliament’s public spending watchdog has dubbed the Department for Work and Pensions’ (DWP) decision to award Capita a £370 million shared service contract “extraordinary,” given the outsourcing firm’s “failings” in supporting the Civil Service Pension Scheme (CSPS).
In a letter to the Cabinet Office, Sir Geoffrey Clifton-Brown included observations about the controversial award by the DWP, which is already the subject of a legal challenge alleging that Capita’s bid was “abnormally low.” Capita said it was part of a “robust procurement process.”
The chair of the Public Accounts Committee sought reassurance that the Cabinet Office had shared details of Capita’s performance on the CSPS before the DWP made its award to the outsourcing firm to provide HR, finance, and payroll services to the DWP, the Ministry of Justice (MoJ), the Home Office, and the Department for Environment, Food and Rural Affairs (Defra).
Capita took over running the CSPS in December last year after winning a £239 million contract. Scheme members, including around 1.5 million current and former public servants, soon began to complain of unrecognized passwords and usernames, The Register reported. They were forced to create new accounts, which were also unrecognized. Broken and circular links in a portal that appeared unfinished and untested also frustrated users.
Retired civil servants in the UK have had their income slashed after payments from the system run by Capita failed to arrive, according to the BBC. Capita told the news outlet it was struggling with a bigger backlog of cases than had been agreed.
Clifton-Brown wanted to know whether the Cabinet Office, which awarded the CSPS contract, had shared details with the DWP before it awarded the shared services contract to Capita.
In the letter addressed to Catherine Little, chief operating officer for the Civil Service, he said: “It was reported on 26th February that Capita has just been awarded a £700 million civil service payroll contract by the Department for Work and Pensions. It seems extraordinary that given the failings that are currently being exhibited in its administration of the civil service pension scheme that Capita would be awarded such a contract. Can I ask what discussions, if any, you, or senior officials within the Cabinet Office had with DWP officials about Capita’s performance prior to the award of this contract?”
The Register has asked Capita, the DWP, and the Cabinet Office to comment.
In March, Capita said it had won the DWP shared service contract for £370 million. Earlier, the public service union PCS said the contract was worth £700 million. The official contract award notice says the contract was awarded for £606.6 million. A DWP official told The Register the £370 million figure was a minimum value without optional services and contingencies. ®