Capita has been chosen to provide four government departments with IT-enabled services, while it continues to face criticism for its botched civil service pension contract.
The deal, worth £370m, will run for an initial seven years, with an option to extend by three years.
The 10-year Synergy Business Process Services contract, which according to the official tender has an estimated value of around £959m over 10 years, supports back-office services for the Department for Work and Pensions, Ministry of Justice, Home Office, and the Department for Environment, Food and Rural Affairs (Defra). It includes HR, payroll, recruitment, finance and procurement services as well as service desk support and the technology that they are delivered through.
Capita works with other partners, including hyperscale cloud suppliers, on the service which begins next month.
According to the tender notice: “The Synergy Programme has been established to bring together the individual department plans in line with the Government Business Service (GBS) published Shared Services Strategy for government.” This includes a single technology strategy.
Capita said: “We took part in a robust procurement process and stand ready to work with the DWP to ensure a smooth transition of service. Our priority remains to ensure value for money for the public.”
Government cash cow
According to figures from Tussell, Capita currently has 232 live contracts with the public sector, worth £7.7bn.
The new government win comes as the supplier is currently in the public spotlight due to major problems with the Civil Service Pension Scheme administration, which it recently took over from MyCSP. A government trouble shooter was recently brought in to lead an “urgent recovery plan”.
This week, Computer Weekly reported that a former civil servant with 40 years’ service has received no payments four months after retiring. Steve Tessier, who has no other source of income, said neither Capita nor the government has contacted him, other than a recent acknowledgement of a complaint he made in November. A backlog of cases to deal with was stated by Capita bosses as a reason for the problems.
Despite his current predicament being induced by a botched outsourcing agreement, Tessier, who spent most of his career at the Ministry of Defence, said that when outsourcing came, he was not ideologically opposed to it.
“There’s nothing that says that what happens in the public sector has to stay in the public sector, especially when it comes to the provision of administrative support and contracted services,” he told Computer Weekly. “But the way we’ve set about it is that we’ve become totally reliant on outsourcing companies. We’ve lost control and we’ve lost accountability over the services that those companies provide.”
A spokesperson from Capita said the company is “deeply sorry for the worry, distress and frustration [pension scheme] issues have caused…sustained progress is being made towards restoring full normal service as quickly as possible”.
One IT outsourcing expert said that questions have to be asked as to how Capita’s reported failures have affected decisions around government contracts.
“The government has demonstrated a failure in procurement in terms of managing them. Time and again, it has demonstrated its ineptitude,” he said, adding that back-office shared services deals are, in theory, “a gift that keeps on giving. The theory is that there are departments and agencies in the shared services [that] will join.”
