Source · Select Committees · Public Accounts Committee
Recommendation 14
14
Acknowledged
New Capita contract incorporates stronger KPIs and penalties to improve accountability and performance
Recommendation
We asked the Cabinet Office what in the current contract was limiting it from holding MyCSP to account for its performance, and what lessons had been learned going forward with Capita. The Cabinet Office responded that the new contract with Capita now contains service-focused key performance indicators, and that failures against all performance indicators can now incur more severe financial penalties the longer underperformance goes on for. It also added that it will have access to a shared data repository with Capita, which would in future be an essential part of managing Capita’s performance.29 We queried whether the Cabinet Office considered the size of the financial penalties applied to MyCSP throughout the contract proportionate given the poor service that members had received at times. The Cabinet Office said that the financial penalties were one of many levers it used to encourage better service from suppliers, and that it wanted to use them “in combination with strategic and wider government leverage.”30
Government Response Summary
The government agrees with the recommendation and states it has embedded a robust contract management policy with a standardised approach for administering and managing contracts, including ensuring staff are skilled and trained, and that the Civil Service Pension Scheme must meet the requirements of the contract management policy.
Government Response
Acknowledged
HM Government
Acknowledged
3. PAC conclusion: The Cabinet Office has not demonstrated it has sufficient capacity and capability to manage the MyCSP contract effectively and has now failed on two occasions to adequately manage the transition from one supplier to another. 3a. PAC recommendation: The Cabinet Office should set out in its Treasury Minute response: • how it intends to ensure that it has appropriate commercial capacity and contract management skills such that it can hold the administrator to account. 3.1 The government agrees with the Committee’s recommendation. Recommendation implemented 3.2 The Cabinet Office has embedded a robust contract management policy that provides a standardised approach for the administering and management of contracts going forward. 3.3 The Contract Management Policy applies to all Cabinet Office staff who are involved in the management of supplier contracts; It applies to all contracts and any other documents that create legally binding obligations on Cabinet Office for the procurement of goods, services and works which may include procurements which are simple in nature and low risk. Further, it applies to a contract throughout the contract lifecycle until all contractual obligations have been completed and the contract completes exit or transition. Key principles: • Assures that a standard approach to Contract Management is undertaken, including compliance with legislative and administrative arrangements. • Ensures contracts are managed in a manner that facilitates business delivery while minimising risk. • Ensures contracts are managed thereby maximising financial and operational performance. • Provides assurance that all staff are adequately skilled and trained, and understand their roles and responsibilities related to managing contracts. 3.4 The Contract Management Policy is designed with Contract Tiering and our Contract Segmentation Approach as its’ key design principle. 3.5 As a gold tier contract the Civil Service Pension Scheme must meet the requirements of the contract management policy. This includes the contract manager being qualified at expert level in contract management. 3.6 The contract also has an SRO who is responsible for ensuring commercial and contractual performance obligations are being met within the contractual requirements.