The Criminal Records Bureau is failing to deliver key services, but
payments to its supplier are set to rise.
IT Services firm Capita expects to double the profits it generates
from its £400m Criminal Records Bureau contract, even though key
services the bureau was to provide have been postponed.
The contract with the agency, which provides employers with checks
on job applicants' criminal history, will be renegotiated in
response to recommendations from an independent review commissioned
by the government, which highlighted a wide range of shortcomings
in how the bureau operates.
The government has been forced to postpone the introduction of the
lowest level of record check, basic disclosure, until the Criminal
Records Bureau's systems have been developed to provide greater
capacity. Civil servants say Basic Disclosure checks have been put
on hold until demand has been met for higher levels of
checks.
Capita has told analysts that the Criminal Records Bureau contract
contributed £30m of turnover and a 6% profit margin in 2002. It
expects its profits to rise to 10% this year on turnover of £40m,
assuming a successful renegotiation of the contract.
In an official response to the findings of the review, home
secretary David Blunkett said the Criminal Records Bureau needed to
improve its efficiency.
Capita, which is also responsible for running the congestion
charging scheme in London, was awarded a 10-year contract to
develop the Criminal Records Bureau's IT infrastructure and operate
parts of the agency in August 2000.
The Criminal Records Bureau, which became operational in March
2001, aims to help employers to identify candidates who would be
unsuitable for certain types of work, especially that involving
contact with children or other vulnerable people.
Last summer, teaching unions expressed dismay over backlogs at the
Criminal Records Bureau, which caused some schools to remain closed
after term began.
Blunkett said the government will now renegotiate its agreement
with Capita to support an IT system upgrade at the Criminal Records
Bureau. This follows calls by the review team for enhancements such
as improved links with the Police National Computer and electronic
applications for checks.
A Home Office spokesman said parts of the deal will be renegotiated
to implement the review's recommendations. "Not all the
recommendations could have been foreseen, so we will be
renegotiating parts of the contract," he said.
Capita said it welcomed the chance to build on recent enhancements
to the Criminal Records Bureau. "We look forward to continuing
[improvements] once the negotiations have been concluded," a
spokesman said.
Experts say the problems experienced at the Criminal Records Bureau
underline the importance of change management in major government
contracts. "Change management in contracts is something that the
government has been poor at in the past. It has not really got the
experience to run the mega-contracts," said Georgina O'Toole,
analyst at Ovum Holway.
Poor project management has already resulted in spiralling costs
for other government IT programmes, such as the Libra project for
IT systems in magistrates courts. Libra was commissioned by the
Lord Chancellor's Department at a cost of £146m in 1998. The scheme
is now expected to cost taxpayers about £390m.
Since its launch, the Criminal Records Bureau has been overseen by
Bernard Herdan, who became chief executive of the Passport and
Records Agency in 1999. At that time, problems with the
implementation of a new IT system at the agency resulted in a
backlog of 565,000 passports, delays of up to 50 days and queues
outside passport offices.