Achieving the intended savings

25. In 2012, the Department forecast that it would save £267 million over 10 years from its partnership with Capita, mainly by withdrawing personnel from the recruitment process and redoplying them to frontline operations.42 In January 2019, the Department forecast that it would now save £180 million, a reduction of 33%. At our evidence session the Department could not, though, provide us with clarity on the number of soldiers that were still involved in recruitment, or would be needed in the future.43 The Department has since written and stated that there are currently 417 military recruiting posts, which includes 374 Regular personnel and 43 Full Time Reserves.44 The National Audit Office found that the Army had employed additional military personnel to improve awareness of recruitment campaigns.45

26. The Army has achieved savings of just £25 million in the first six years of the contract, which means it expects to save £155 million in the remaining four years.46 Achieving this is dependent on delivering the remainder of the Programme within the budget of £1.36 billion. In October 2018, the Army was within budget, but the increased cost of the Capita contract - which had risen from £495 million to £677 million - was a significant factor in the Army using all of the Programme contingency of £199 million. This, and the lack of certainty over the need to use Army personnel to boost recruitment in the future, meant that the Army was not confident of achieving these savings.47

27. The Army and Capita jointly developed the online recruitment system. The Army incurred costs of £113 million and Capita invested £60 million to bespoke the system to meet the services' recruitment processes and criteria,48 Capita told us that the Army will have an in-perpetuity right to use the system for an industry-standard maintenance fee.49 We were concerned, however, at the risk of commercial exploitation and the potential future cost to the Army, given that it had co-created and co-funded the system. The Army is exploring its future options, including its ability to adapt the system in the future, the potential costs and possible alternatives.50

28. The Army aimed to transform recruitment by bringing in Capita's expertise in recruiting and marketing.51 It removed 900 of its military and civilian personnel as Capita introduced its own professional recruiters. Given this, we were not convinced that the Army was doing enough to build up its capability so that it would have the option of reverting to an in-house approach in 2022, rather than be reliant on Capita.52 The Army has recently introduced a new Programme to explore its options for recruiting across the three frontline services and the Department's civilian workforce. It plans to trial new ideas to build its understanding of the options before 2022, and inform its thinking on whether to continue with its partnership with Capita.53 The Department plans to consider its options in early 2020.54

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42 Qq 121, 124

43 Qq 122, 123

44 Letter from Stephen Lovegrove to Chair of the Public Accounts Committee, 25 January 2019