Capita won the contract after outbidding a tender from PricewaterhouseCoopers by submitting an offer of £250m over ten years compared with PwC’s bid of £400m.
However, because the Capita bid was based on Home Office assumptions that 70-85% of applications would be by telephone rather than in writing – and exactly the opposite happened – the cost of the contract has risen to £400m.
This for a slower service, delivered a year late and providing less than had been promised, MPs said.
PwC had estimated that 40% of applications would be on paper and 60% by telephone.
Jon Trickett, a Labour member of the PAC said that Home Office officials had ignored warnings about the contract. ‘It had to be one of the most incompetently let contracts this committee has seen, certainly since I have been on it,’ he said.
The Times reported Trickett as saying that both Capita and the Home Office had made assumptions about the number of applications that would be received on paper which were ‘hopelessly optimistic’.
‘We got the highest tender rather than the lowest in the end,’ he added.
Just one half of UK practices have implemented a pricing structure around auto enrolment implementation and advice - with many suffering increased costs
Deloitte's north-west Europe foray; BDO, Smith & Williamson investment paths; Shelley Stock Hutter; and Wilkins Kennedy discussed by editor Kevin Reed on our Friday Afternoon Live broadcast
Accountants should alter their perspective on auto-enrolment to maximise business opportunities, according to Eric Clapton.
Kevin Reed discusses whether new accountancy group Cogital can rival the Big Four...and its likely direction of travel