Defence recruitment contract fails to deliver more than £100 million in savings

A major recruitment contract for the Ministry of Defence has failed to deliver more than £100 million in planned savings so far, new figures reveal.

A Tory former defence minister urged the Army to come up with a "Plan B" for its recruitment in the wake of the findings "rather than continuing to have to rely on Capita's poor performance".

The £1.3 billion contract with the outsourcing giant has resulted in just £2.73 million of savings in its first six years, according to figures released to Parliament.

This compares to £104.33 million of reduced costs earmarked in the project's original business case in September 2011.

The MoD said it still expected to achieve virtually the same level of savings over the 10-year contract, citing increased savings on military staff.

Labour MP Kevan Jones, a former defence minister, said: "The chaotic Capita contract has failed to meet targets and is undermining the strength of the British Army in the process.

Kevan Jones (PA)
Kevan Jones (PA)

"It is also concerning that ministers are now saying that increased spending on this contract will only be offset by increased savings in military manpower costs, at a time that MoD plans to cut troop numbers by thousands are being reported."

Conservative MP Mark Francois, another former defence minister, last year wrote a report saying that the Army was missing its recruitment targets by up to 30%.

He told the Press Association: "In my report on military recruitment, I highlighted that the Capita recruitment contract for the Army has been seriously under performing for several years and so I recommended that the Army should come up with a "Plan B".

"In light of recent events, I believe that work should be accelerated so that the Army has a viable alternative rather than continuing to have to rely on Capita's poor performance."

In October it emerged that the Army would be replacing 120 full-time reservists running careers centres with civilian staff employed by Capita.

Savings over the life of the contract include costs that would have been incurred if recruitment had continued to rely heavily on military personnel instead of civilian staff.

Mark Lancaster (John Stillwell/PA
Mark Lancaster (John Stillwell/PA)

Responding to a question from shadow defence secretary Nia Griffith, defence minister Mark Lancaster said: "The recruiting partnership project is a 10-year output based contract between the Army and Capita, designed to incentivise the provider to deliver the right quantity and quality of recruits.

"The main gate business case, in September 2011, forecast £267 million of benefits over the life of the project. The revised benefits forecast, approved in May 2016, is £266 million.

"The shortfall in benefits in the early years reflects additional funding injections, including to enable defence recruiting system delivery.

"We expect these to be offset in later years by increased savings in military manpower costs."

An Army spokesman added: "We are only halfway through a 10-year contract and are confident that we will meet the savings of £266 million in the next four years."

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