The government waived £1.5 million of a financial penalty for outsourcing giant Capita following last year’s SATs fiasco, Schools Week can reveal.
Ministers were contractually entitled to slash the fee paid to the company by £2.8 million in the wake of a helpline meltdown and the disappearance of more than 2,000 exam scripts during last year’s key stage 2 tests.
But the latest accounts for the Standards and Testing Agency (STA) reveal officials decided to shave off over half of that sum in a bid to “de-risk delivery for future test cycles”, reducing the amount to just £1.3 million.
In exchange for the waiver “the supplier has agreed to undertake additional actions aimed at improving performance levels, including significant investment in additional resource”.
The revelation has sparked calls for MPs to probe whether the £18 million-a-year contract is delivering the taxpayer with value for money.
‘Capita has been let off’
Liberal Democrat education spokesperson Munira Wilson branded the move “yet another reward for failure under this government”, and said parents would be “outraged”.
She said letting Capita off the full penalty “in the hope they’ll try harder next time simply isn’t good enough”.
“This is money that should be put to work in classrooms, not boosting Capita’s profit margins.”
The STA launched a “lessons learned” assessment of Capita’s first SATs series under its nine-figure contract last summer following a series of problems.
The review acknowledged delivery issues “caused significant frustration and inconvenience” to schools, councils and families.
This came after two-thirds of disgruntled teachers calling the firm’s SATs helpline hung-up after no-one answered the phone as the service went into meltdown at the height of the 2022 test season.
Government could have withheld £2.8m
The company later apologised to schools and claimed call volumes to the National Curriculum Assessments helpline – which peaked at 7,100 a week – were “significantly” above forecasts.
We later revealed that more than 2,000 papers were still missing in September, leaving schools without results for some pupils as the academic year began.
The DfE said the STA “paid a reduced fee to Capita in recognition of issues with delivery of the key stage 2 tests in 2022, including problems with the helpline and with missing and lost papers”.
It added that the agency was “contractually entitled to reduce the fee paid to the company in 2022-23 by £2.8 million”.
However, it made “a commercial judgement to waive £1.5 million of this so the supplier could undertake additional actions aimed at improving performance levels”.
MPs ‘should probe value of Capita contract’
The department insisted the reduction “took into account the need to support investments in improvements to the service”.
Capita’s 2022 annual report shows its adjusted operating profit stood at £102.9 million.
Geoff Barton, general secretary of school leaders’ union ASCL, asked “whether it was necessary to waive part of a penalty to fund improvements” that should have been “expected from the contractor”.
“We would suggest that the public accounts committee should take a detailed look at this important contract and whether it is delivering good value for money.”
A DfE spokesperson stressed the department has “closely monitored the remediation activities that Capita has undertaken” and has seen “improvements in service delivery” this year.
Capita also noted that it had “met or exceeded targets for this year’s return of results”. It said its goal for papers marked and returned was 99.9 per cent, and that “we have reached 99.92 per cent”.
A spokesperson for the firm said “this year’s test cycle has shown we have made significant strides in transforming the service we provide for the STA”.
“Any lost paper or impact to a pupil’s result is regrettable, but there will always be the possibility of error at each stage in such a complex process. We will continue to work with our suppliers and schools to ensure any risk is minimised.”