Sema shares soar as it wins pounds 305m contract to handle disability benefit tests

THE DEPARTMENT of Social Security yesterday awarded a huge contract to handle the medical assessment of disability benefit claims to Sema, the Anglo-French computer services group. News of the deal, worth pounds 305m over a five-year period, sent shares in Sema soaring. They ended the day up 72.5p at 1910p.

Under the terms of the controversial contract, which has faced stiff trade union opposition, Sema will take over the management of 220 Civil Service doctors, 1,200 administrative staff and the 3,000 part-time doctors who help assess whether claimants qualify for disability or incapacity benefit.

The DSS said Sema would bring enhanced management and increased investment in technology to the Benefits Agency Medical Service (BAMS), thereby speeding up the service.

John Tilley, managing director of Sema, said: ``The Sema Group, working with the DSS, will modernise the existing provision with the aim of giving claimants service improvements and taxpayers better value for money.''

The move is unusual for Sema, which normally specialises in information technology outsourcing and systems integration projects. Although the BAMS project involves some information technology, it is more of a pure outsourcing project, requiring superior organisational and management skills. Sema is understood to have beaten off bids from rival outsourcing groups such as Capita and Andersen Consulting to win the contract.

The DSS insisted that the decision to award the contract was not part of the wider review of the welfare state which is currently taken place, and added that it did not have a dogmatic view about outsourcing services to private contractors.

However, the award of the contract suggests that the pace of outsourcing is unlikely to slow under the Labour government, even though several contracts, like BAMS, were first dreamed up under the previous administration.

The Labour government has already awarded a pounds 450m contract to handle the pay, pensions and administration for the armed forces to EDS, the US outsourcing giant.

It is also currently conducting trials for a huge contract to improve efficiency in the Benefits Agency and help reduce fraud. Groups on the shortlist include a partnership between IBM and EDS, as well as a consortium including Sema and the management consultancy group Deloitte & Touche. The contract is expected to be awarded in the next six months.

However, many large government outsourcing deals have run into problems. The Inland Revenue computer system, designed by EDS as part of a pounds 1.6bn contract, crashed under the burden of self-assessment claims. And a two year delay to a pounds 1.5bn contract designed to pay benefits with electronic "smart cards" and computerise Post Offices around the country, managed by the computer group ICL, has prompted the government to consider bringing in rival suppliers.

Given the size and complexity of the contracts, industry experts are not surprised that they frequently run into problems. "If I had a huge computer contract to award I would divide it between three or four companies," said Richard Holway, an industry analyst. "But the Government seems to think that these large contracts still make sense."

Start your day with The Independent, sign up for daily news emails
Sport
sportWWE latest including Sting vs Triple H, Brock Lesnar vs Roman Reigns and The Undertaker vs Bray Wyatt
Arts and Entertainment
Louis Theroux: By Reason of Insanity takes him behind the bars again
tvBy Reason of Insanity, TV review
Arts and Entertainment
Cassetteboy's latest video is called Emperor's New Clothes rap
videoThe political parody genius duo strike again with new video
Arts and Entertainment
tvPoldark, TV review
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor
How to make your own Easter egg: Willie Harcourt-Cooze shares his chocolate recipes

How to make your own Easter egg

Willie Harcourt-Cooze talks about his love affair with 'cacao' - and creates an Easter egg especially for The Independent on Sunday
Bill Granger recipes: Our chef declares barbecue season open with his twist on a tradtional Easter Sunday lamb lunch

Bill Granger's twist on Easter Sunday lunch

Next weekend, our chef plans to return to his Aussie roots by firing up the barbecue
Joe Marler: 'It's the way I think the game should be played'

Joe Marler: 'It's the way I think the game should be played'

The England prop relives the highs and lows of last Saturday's remarkable afternoon of Six Nations rugby
Cricket World Cup 2015: Has the success of the tournament spelt the end for Test matches?

Cricket World Cup 2015

Has the success of the tournament spelt the end for Test matches?
The Last Word: Justin Gatlin knows the price of everything, the value of nothing

Michael Calvin's Last Word

Justin Gatlin knows the price of everything, the value of nothing