Capita

Lord Hunt of Kings Heath Excerpts

Tuesday 24th April 2018 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the Minister for repeating that Answer. I think that this is the third occasion on which he has come to the House to discuss these issues, twice in relation to Carillion and now in relation to Capita. It is striking that from the Government’s point of view, Capita is one of the limited number of companies which are privileged to have large government contracts, yet it is interesting to note that the boss of Capita admitted today that the company has no long-term strategy at all. That, to say the least, is a little worrying.

I would also say to the noble Lord that Capita’s record is, at best, patchy. When I mention the messed-up management of the dental register which left hundreds of dentists standing idle, its failure to maintain the Primary Care Support England service which supervises GP and patient records, and failing on the Army recruitment contract, one questions why this Government in particular are so wedded to giving yet more contracts to this company and similar ones. I hear what he has said about Capita being a different model and having a different structure from Carillion, and he said that shareholders will be taking the burden, but I still think I am right to ask him what contingency plans Ministers have put in place to deal with possible defaults on these contracts. Also, can he confirm that improvement plans have been agreed with Capita since its string of profit warnings and yesterday’s financial statement?

The noble Lord said that it is of strategic importance for the Government to have, I think by implication, contracts with a limited number of providers. However, the other side of the coin is that if we have a domino effect—first Carillion, then Capita—a huge swathe of government contracts will be put at risk. Is it right that so much government work should be put in the hands of a very limited number of companies? I would also like to ask whether he agrees that this excludes SMEs from many prime contracts. They have to subcontract with these principal contractors, but we know what happened with Carillion. Carillion was a very late payer and as a result, many SMEs went bust due to its collapse. What is the Government’s approach to SMEs and can we ensure that they get a fair crack of the whip?