19. The Army and Capita have introduced a series of new initiatives to address the problems that they have encountered and to address Capita's under-performance. They have introduced new arrangements for managing recruitment, bringing together the eight areas of the Army with a responsibility for aspects of recruitment, with meetings chaired by senior personnel from both bodies.25 The online system is now operational and provides better data to understand the progress of applications through the recruitment process.26 In January 2019, the Army and Capita also launched a new marketing campaign and told us that applications were three times higher than in January 2018.27
20. Capita has performed poorly against the key performance indicators in the contract, meeting a target just four times out of 228 since August 2015. It accepted that it was not pleased with this performance but was confident that the recent changes will lead to improvements.28 As a result of the contract penalty clauses, the Army has deducted £26 million from its payments to Capita (6% of contract payments since 2012) which, in most months, was the maximum amount possible. The Army was not, though, able to provide us with a convincing answer on how it would penalise Capita for under-performance in the future, and the conditions under which it would consider terminating the contract. The Secretary of State has previously said that the Department would remove the contract if it "lost confidence in Capita".29 But the Department could not provide us with clarity on in what circumstances - other than the withdrawal of key staff - or what level of under-performance would lead to this and how long it would take to disentangle Capita from the process.30
21. However, despite increased applications, Capita has not yet met the Army's targets for recruiting new soldiers.31 The Army forecasts that Capita will recruit 60% of the soldiers that it needs in 2018-19. The Army also told us that it had a high degree of confidence that it would achieve 80% of its requirement by March 2020 and that Capita would be recruiting the full demand by end of contract. Capita also stated its confidence in meeting or exceeding these targets.32
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25 Q 45
26 Q 56
27 Q 35
28 Qq 32, 37, 79
29 Qq 24-26, 35
30 Qq 128-132
31 C&AG's Report, para 20
32 Qq 5, 42, 44