Capita makes £100m in army recruitment fiasco

associate business editor

The government contractor Capita has made more than £100m in just two years for a delayed army recruitment project scarred by IT disasters and missed enlistment targets.

In a series of Parliamentary answers, Anna Soubry, the Defence minister, revealed the MoD has already spent £300m of the £1.36bn budget for the Recruiting Partnering Project. The contract is supposed to introduce private sector nous to help sign up new recruits more efficiently and has already resulted in a new centre in Wiltshire where 220 Capita staff work alongside the army.

A third of the money spent on the project between March 2011 and March 2014 was on Capita, although the FTSE 100 group started only in 2012. But much of its work was badly hindered by what Scottish National Party defence spokesman Angus Robertson told The Independent was the "incompetent and wasteful culture of MoD procurement".

The project relies on improvements to the way online recruitment works. The MoD tried to upgrade an existing system, known as Atlas, rather than let Capita build new, more appropriate IT.

In January, Philip Hammond, the Defence Secretary, said the army had been forced to write off £6.7m, after the system failed to work properly, costing taxpayers nearly £1m a month to run an interim replacement system.

Mr Hammond said that Capita's new system would cost £47.7m, though the Parliamentary answers show this has since been reduced to £42.9m. The IT fiasco helped to put the project nearly two years behind schedule, but the MoD has not reprimanded those officials responsible.

Although the fault of the IT failures rests with the MoD, Capita has presided over a slump in interview and selection tests since the contract started in March 2012.

In the first three months of 2014, the army was supposed to recruit 1,750 reserves, but only signed up 1,310. Capita's former chief executive Paul Pindar enraged MPs when he told a Commons committee in November that recruitment was in crisis because "there are no wars on".

In a report earlier this month, the National Audit Office said that IT problems had caused targets to be missed but added that "not all of the poor performance can be attributed to IT issues".

Mr Robertson said: "To find out that at a time of drastic cuts to manpower £300m has been spent on an ineffective recruitment system is unacceptable. This incompetent and wasteful culture of MoD procurement sadly continues unabated and unpunished."

Capita yesterday said: "Capita's contract with the MoD is a partnership and we are working closely with the Army to overcome initial setbacks and enhance the process."

An army spokeswoman added: "Capita is building a new IT platform that will be ready next year and in the short-term we have introduced work-arounds and mitigation measures to the old IT platform to simplify the application process."

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