Capita fined £2m for CRB vetting delays

22 May 03
The government has fined Capita £1.8m for its failings at the Criminal Records Bureau while granting the company an extra £8.4m to compensate it for last-minute changes to the system, Public Finance has learned.

23 May 2003

Lord Falconer, minister in charge of the CRB, disclosed the liquidated damages and service credits incurred by Capita this week following complaints by the Liberal Democrats.

In a letter, seen by PF, Paul Goggins, the new Home Office junior minister, claims that ministers have now decided that it is in the 'public interest' to disclose Capita's fines – despite contractual clauses and the company being unwilling 'for it to be released in the public domain'.

The company, which runs part of the CRB in a public-private partnership, has been fined more than £1m for 'its failure to meet service standards' between March 2002 and January 31 this year. This includes its failure to process applications for criminal checks within three weeks and the enormous backlog in vetting teachers last summer.

It has also been fined 'liquidated damages' for delays in setting up its web-based service for applications and for delays in its 'development programme'.

The letter also reveals that the Home Office is continuing to fine the company for backlogs in criminal record checks, although these sums are the subject of 'ongoing negotiations'.

Goggins points out that Capita has been paid £20.4m for processing disclosures up until January this year and £2.9m in ancillary charges.

But what Goggins fails to reveal is that Capita has been paid an extra £8.4m between March 2002 and January to compensate it for the Home Office's last-minute changes to the CRB's systems.

One of the causes of the CRB's backlog, acknowledged by the government's independent review team, was the Home Office's decision to allow paper-based applications for criminal checks several months before the agency was launched. Capita was unable to cope with the flood of applications but has since been compensated for 'changes in business processing'.

Sources close to the CRB said the agency was in chaos with slippages in the Home Office's schedule of reform. The department is due to announce a 200–300% increase in its fees for disclosures but has to do this in the next few weeks if it is to come into effect by July 1. Home Secretary David Blunkett is said to be 'uncomfortable' with the increases and could delay the announcement.

Capita is also renegotiating its £400m-plus contract with the Home Office, which will not be completed until the autumn.

'Taxpayers deserve an apology from the home secretary,' said Matthew Taylor, LibDem Treasury spokesman. 'None of the officials involved in the initial planning of the CRB have lost their jobs. It is surely now time for them to step down.'


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