Capita accused of £150m 'blunders'

Bungles over a contract to run the Criminal Records Bureau have cost taxpayers £150million, MPs claimed today.

The Government struck a £ 250million deal with private firm Capita, the lowest-priced bidder, to run the operation for 10 years.

But forecasts about demand for the service proved wildly inaccurate and the cost spiralled to £400 million - -well above the bids submitted by two rival firms.

There are fears that the policy of providing free checks for voluntary groups may have to end as a result of the shortfall.

MPs on the Public Accounts Committee have investigated the way the contract was negotiated.

Labour MP John Trickett said: "This has to be one of the most incompetently-let contracts this committee has seen, certainly since I have been on it. We got the highest tender rather than the lowest in the end."

Tory MP Edward Leigh, the committee chairman, said: "On the evidence before us, this was a completely unsatisfactory state of affairs."

The Criminal Records Bureau provides vital checks on the backgrounds of individuals, on behalf of employers and voluntary groups.

It has issued 3.8 million disclosures for people working with children, the elderly and other voluntary groups.

However the introduction of the service, planned for 2001, had to be delayed because the system was not ready in time.

The Home Office assumed that between 70 per cent and 85 per cent of requests for checks would come by telephone. In fact, the majority came in writing, causing work to pile up at the bureau's Merseyside headquarters.

Despite the mistakes, the MPs were told that no one has lost their job over the affair.

Ministers introduced free checks for voluntary groups after MPs complained that the cost of having helpers vetted could force local sports clubs and youth clubs to close down.

Capita, the firm at the centre of the row, is best known as the operator of Ken Livingstone's £5-a-day congestion-charge. It is Britain's biggest outsourcing business and made pretax profits of £51 million in the first six months of last year, up 27 per cent on a year earlier.

Recent successes include winning a £125 million contract from the Department of Trade and Industry to manage a compensation scheme for former coalminers. But the company was criticised by MPs after a scheme to fund college students, which it ran for the Education Department, was hit by fraud.

Chairman Rod Aldridge, a 56-yearold former local authority accountant, and his chief executive Paul Pindar, 44, own shares in the group worth more than £100 million.

Capita is considering moves to franchise out its expertise in road-user charging after its success in London.