Army chiefs have admitted they were “naive” when they outsourced the recruiting of new recruits to Capita.
Giving evidence to the Public Accounts Committee, Lieutenant General Tyrone Urch, commander of Army Home Command Group, admitted the early period of the contract “does not look pretty” and “we made some bad mistakes and some errors”.
The contract has been beset with problems, including consistently missed recruitment targets, waits of up to 400 days between candidates applying and being accepted and a high percentage of drop-outs.
Urch said the MoD “insisted that Capita use an antiquated IT system” and it allowed Capita to “engage in a centralised call system way of doing business” which meant the military “lost our ability to nurture our candidates”.
The contract was let in 2012 during the war in Afghanistan, when the organisation responsible for recruiting was “busy, engaged in training and learning lessons from Afghanistan”, said Urch, while the contract had “10,000 lines or areas of contract compliance” and was “way too complicated”.
Urch admitted to a “naive approach that we took in thinking that we could subcontract out the idea of an Army recruiting sergeant to another organisation that was not military”.
“That was a failing,” he said.
MoD savings from the 10-year contract were now expected to be £180m, against anticipated savings of £267m in the original business case, MPs were told.
Urch said processes and governance were now in place and he expected recruitment to reach 60% of what was required by the end of this year, 80% by the end of 2020 and “full demand” by the end of the contract.
The MoD’s chief commercial officer Andrew Forzani said it had been “pretty much deducting the maximum” penalties from Capita since 2015 over missed targets.
“We are using the full force of the performance regime,” he said. “We think we have been pretty tough on Capita under the mechanism of the contract.”
Jonathan Lewis, chief executive of Capita, said the penalties, coupled with £60m investment the company had made, meant that “over the term of this contract we will lose a very considerable sum of money”.
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