Capita accused of using major government contract to short-change small companies, driving some out of business
This article raises some interesting questions about the role of public sector procurement. I have always thought that getting the greatest resources to the point of delivery, particularly in rural areas, where the money stretches less far, is a real challenges. Approaches like those in this article have a diametrically opposite effect and impact negatively on the sort of small businesses we have in rural locations who become part of bigger supply chains. How many RSN members have signed up to deals of this nature?
The controversial outsourcing giant Capita is facing an investigation into allegations that it used a major government contract to short-change small companies, resulting in some going out of business.
The company has been hit by allegations that it exploited its dominant position at the expense of the small suppliers it works with – while taking a minimum 20 per cent cut of the value of all contracts to administer a lucrative civil service training scheme. Three years ago ministers hailed the £250m contract to provide all civil service learning and development training as a model of how to open up the public sector to small businesses and provide better value to the taxpayer.
Under the deal, Capita took over responsibility from individual government departments for procuring training while ensuring that the majority of the work was delivered through “an open and competitive supply chain” to allow small and medium enterprises (SMEs) access to government business.
But a group of 12 companies involved in the scheme have now formed a group to take their complaints to the Cabinet Office and the National Audit Office and demand an investigation into Capita.