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Capita's contracts with the Ministry of Defence

Inquiry

Scope of inquiry

The British Army needs to continually recruit new soldiers and officers to replace those who leave or retire from service. In July 2018, the Army was 5,600 regular soldiers and officers (7%) below its required strength and will not meet its 2020 target of 82,000 regulars. It has significant skill shortages in specific trades. The failure to meet its recruitment requirements can affect the Army’s ability to meet operational demands and new threats.

In 2012, the Army contracted with Capita to transform its recruitment approach. The Army committed £1.3bn to a 10-year programme and partnership with Capita to manage its recruitment process. Since the contract began Capita has not recruited enough Army regulars and reserves in any year. In 2017-18, Capita recruited 6,948 fewer regular and reserve soldiers and officers than the Army’s target. The shortfall has been largest for regular soldiers. Since the contract began, Capita has missed the Army's annual target for regular soldiers by an average of 30%, compared to 4% in the preceding two years.

In April 2017, the Army agreed to reduce Capita’s recruitment targets by around 20% for the next three years as it believed Capita was insufficiently incentivised to improve performance. Over the last year, the Army and Capita have introduced some significant changes to their approach to recruitment, although these have not yet resulted in the Army’s requirements for new soldiers being met. The cost of the Capita contract has risen by 37% to £677 million. The Project will not achieve its planned savings of £267 million for the Ministry of Defence. The Army has begun to consider options for the successor contract to start in 2022 and has commissioned a review to understand the lessons from the Project.

A recent NAO report has found that the Army has not managed either the project, or contract, effectively. Moreover, it found that the Army and Capita underestimated the complexity of the proposed changes to recruitment.

The Committee will challenge officials from the Ministry of Defence and Capita on why the Project is still failing to meet recruitment targets and how they plan to respond. Members may also wish to scrutinise the Army’s management of the Recruiting Partnering Project.

The Committee may also wish to examine the performance of MOD’s other contracts with Capita and the performance of MOD’s contract with Annington Property Limited.

Reports, special reports and government responses

View all reports and responses
80th Report: Capita's contracts with the Ministry of Defence
Inquiry Capita's contracts with the Ministry of Defence
HC 1736
Report
Response to this report
Letter from Sir Stephen Lovegrove to Chair, regarding Committee report on Capita's contracts with the Ministry of Defence - dated 25 July 2019
Correspondence
Letter from Sir Stephen Lovegrove to Chair, regarding Committee report on Capita's contracts with the Ministry of Defence - dated 25 July 2019
Inquiry Capita's contracts with the Ministry of Defence
Correspondence
Correspondence from Ministry of Defence to Chair, Meg Hillier regarding Ministry of Defence's arrangement with Annington Property Limited - dated 30.11.2018
Inquiry Capita's contracts with the Ministry of Defence
Correspondence
Letter from Jon Lewis CEO of Capita to Chair regarding Capita's Army Recruitment contract with the MoD - dated 31.12.19
Inquiry Capita's contracts with the Ministry of Defence
Correspondence

Oral evidence transcripts

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14 January 2019
Inquiry Capita's contracts with the Ministry of Defence
Witnesses Stephen Lovegrove, Permanent Secretary, Andrew Forzani, Chief Commercial Officer, Lt Gen Richard Nugee (Chief of Defence People), Lt Gen Tyrone Urch (Commander of Army Home Command Group), Ministry of Defence, Jonathan Lewis, Chief Executive, Capita
Oral Evidence

Written evidence

No written evidence published.

Contact us

  • Email: pubaccom@parliament.uk
  • Phone: 020 7219 5776 (general enquiries) | 020 7219 8480 (media enquiries)
  • Address: Public Accounts Committee, House of Commons, London, SW1A 0AA