Express & Star

Government must 'get a grip' over Capita - MP

John Spellar has accused Capita of a 'lamentable performance' in its managing of a recruitment contract for the armed forces.

Published
Warley MP John Spellar

Speaking in the Commons, the Labour MP for Warley urged the Government to 'get a grip' over public sector contracts and learn lessons from the collapse of Carillion.

Capita shares plunged almost 50 per cent after the major outsourcing firm warned on profits and announced a major shake-up.

The firm has a £752 million contract with the Ministry of Defence.

Responding to an urgent question, Mr Spellar sought assurances that no taxpayer money would be wasted on bailing out contracts and companies whose business model is based on 'high-debt and maximising dividends for shareholders'.

He slammed the company’s 'lamentable performance on their recruitment contract for the Armed Services', adding: “How is it right that the state has to foot the bill every time the companies mess up and they are unable to provide the basic services they were contracted to do.”

The Government has claimed Capita is not in a 'comparable position to Carillion', adding that it is monitoring the firm's financial health.

Mr Spellar has previously called on the Government to learn the lesson from the collapse of Carillion.

He said it was now important to 'empower regulators to ensure that companies providing services do not collapse in a manner such as Carillion – this measure would not only save the taxpayer money, but also allow smaller businesses who operate a sustainable model to compete for contracts'.