Capita shares down on NAO’s British Army report

Capita shares down on NAO’s British Army report

Shares in Capita fell over 6% on Friday after a new government report revealed that it has failed to meet targets recruitment contract for the British Army every year.

The outsourcing firm has a £495 million contract with the British Army since 2012, where Capita has been responsible for recruitment.

According to the report from the National Audit Office (NAO), Capita has failed to meet targets every year since the deal was awarded and recruitment has been as low as 21% of the British Army’s requirements.

The NAO has said that the Army Recruiting Partnering Project has “underestimated the complexity of what it was trying to achieve” and there are “significant problems”.

A spokesperson from Capita said: “As the NAO report states, both Capita and the Army underestimated the complexity of this project. Our focus is now on working with the Army to deliver a recruitment process fit for the 21st century.”

“We have overhauled governance on the contract and are already seeing improvements, with applications at a five-year high and a reduction in the amount of time it takes candidates to join the Army. We are absolutely committed to getting this partnership right.”

The Army and Capita believe the changes to the recruitment approach and the new online system will lead to an increased number of recruits. Recruits have already increased over the past two years.

A spokesman from the British Army said: “We are fully committed to improving our recruiting process. Working with Capita we have put in place a plan to address the challenges. The army has developed a range of measures to speed up the recruitment process.”

“This includes new measures to reduce the time between applying and starting training, greater access to military role models for recruits and a new IT system.”

“The army meets all of its operational commitments to keep Britain safe,” he added.

Shares in Capita (LON: CPI) are currently trading down 4.24% at 109,65 (1119GMT).