Government ‘having a laugh’ with preferred bidder for £700m contract, says Blackpool MP
The company behind the “catastrophic” civil service pension scheme is the preferred bidder for a new £700 million contract, the Commons has heard.
A Labour MP accused the Government of “having a laugh” as she raised concerns about outsourcing firm Capita. Lorraine Beavers (Blackpool North and Fleetwood) was among a group of MPs from across the House to criticise the company for leaving their constituents without income, after failing to pay them when it took over managing the civil service pensions in December.
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Addressing the Commons on Thursday, she said: “Last week, I heard that the Government had made Capita the preferred bidder for a £700 million contract for shared services across Government departments.
“Are they having a laugh? Given Capita’s appalling performance in administrating the civil service pension scheme, which has affected hundreds of my constituents, will the minister urgently review the procurement process for this contract and commit to bringing this work back in-house to ensure Capita don’t mess this contract up as well?”
Capita took over the pensions scheme in December, after a two-year lead-in, administering pensions for public sector institutions such as the Crown Prosecution Service, HMRC and the MoD.
Responding to Ms Beavers, Cabinet Office minister Nick Thomas-Symonds said: “Members across the House should be in no doubt of this Government’s desire to hold Capita to account robustly for its responsibilities under its contracts.”
Kim Johnson, the Labour MP for Liverpool Riverside, said the Government would “reward failure” by issuing new contracts to outsourcing companies, while SNP MP Brendan O’Hara said the company’s handling of pensions had been “nothing short of catastrophic”.
Mr O’Hara said: “The Government were well warned that Capita were ill prepared for a job of this size, but they pressed ahead regardless. While Capita must shoulder much of the blame, the Cabinet Office has serious questions to answer for their responsibility in this fiasco.”
Cabinet Office minister Satvir Kaur said the situation facing civil servants was “completely unacceptable” but stressed the contract had been signed under the previous Tory government. Conservative former minister John Lamont warned: “The real failure is the Cabinet Office’s inability to negotiate contracts that include financial sanctions to drive up performance.”
Mr Thomas-Symonds replied: “The Cabinet Office has already withheld payments from Capita for not meeting particular milestones, so he can rest assured, we will use every lever under these contracts to enforce them.”
A spokeswoman for Capita said: “We are deeply sorry for the worry, distress and frustration these issues have caused.
“Additional staff are being trained and deployed to address the remaining backlog, which we inherited in December from the previous administrator, and sustained progress is being made towards restoring full normal service as quickly as possible.”