Government Accused Of 'Outsourcing Racket' After Capita Given Defence Contract

The Government has been accused of overseeing an "outsourcing racket" after Capita was awarded a new contract to run UK military fire and rescue services - despite a financial health warning.

Capita confirmed on Tuesday that it had been selected for the contract, which is estimated to be worth about £500 million and involves the running of about 70 military fire stations worldwide.

Shadow defence minister Fabian Hamilton, who secured an urgent question in the Commons on the matter, told ministers the system of awarding contracts had "simply failed".

He said: "The minister's department received advice as recently as the June 7 that Capita represents a 10 out of 10 risk.

"So may I ask the minister how the decision was made to give this contract to Capita?"

He added: "We know that Capita has a record of poor performance delivering MoD contracts, they were stripped of the defence estate contract, and the less said about their about recruitment contract the better.

"In spite of this, the Government has knowingly chosen to give Capita another contract. What specific measures has his department put in place to monitor the delivery of this contract and to take penalty action for poor performance if necessary?"

Mr Hamilton also raised concern that the contract may result in redundancies.

He said: "A number of defence fire workers will be very worried indeed about this news. What assurances can he give us today about the future for these workers, their pensions and what help will be provided for them if redundancies do occur?"

He added: "This Government's ideologically driven approach to outsourcing public services at any cost has simply failed. I believe we must end the racket of outsourcing and deliver solutions that benefit taxpayers and service users alike."

Defence Minister Tobias Ellwood, responding on the issue of redundancies, said: "Just under 600 civilian workers will be transferred across. I absolutely hope that they will not lead to any changes. If there are any, I hope it will be done through redundancies as well."

Speaking earlier, Mr Ellwood told MPs the contract would deliver savings to the department as well as investment.

He said: "This contract will deliver improvements in the safety of both military and civilian firefighter personnel, improvements in the equipment and training available to them, and it will deliver savings which will be reinvested into the defence budget."