Skip to main content

Capita

Volume 502: debated on Wednesday 16 December 2009

To ask the Secretary of State for Energy and Climate Change what meetings (a) each Minister and (b) officials in his Department and its predecessors have had with Capita Group plc on the administration of the miners' compensation schemes since the inception of those schemes. (303417)

Capita became the Department's claims handling contractor for the Coal Health Compensation schemes in 2004 following their acquisition of the contract from another supplier. Capita secured the current contract for a further period following a competitive process and that contract commenced in August 2006. The current contract is due to end on 30 July 2011.

Ministers have not been directly involved in operational meetings with Capita but are kept up dated on progress.

At official level the core governance arrangements for managing the contract and Capita's role are by monthly contract and scheme management meetings chaired by the Head of the Coal Liabilities Unit (CLU) in DECC. In addition a range of operational and contract compliance meetings are also held regularly between CLU officials and Capita representatives.

In addition the High Court Judges overseeing the Coal Health Compensation schemes have taken a direct interest in all aspects of the administrative handling of the claims.

To ask the Secretary of State for Energy and Climate Change (1) with reference to the answer of 12 November 2009, Official Report, column 669W, on industrial diseases: compensation, on which occasions Capita Group plc has not received one hundred per cent. of the Service Level Agreement payments which could have been paid to it; and what the reasons were in each case; (303418)

(2) with reference to the answer of 12 November 2009, Official Report, column 671W, on industrial diseases: compensation, who has responsibility for reviewing Capita's performance; which contractual terms Capita has (a) met and (b) not met; how frequently Capita's performance is assessed; and what performance measures are used in such assessments.

The Coal Liabilities Unit (CLU) within DECC has the responsibility for reviewing Capita's performance, with most of the Service Level Agreements (SLA) also audited by our external auditors, PricewaterhouseCoopers (PwC).

In addition to the SLA regime, the Department's contract with Capita also provided milestone payments linked to claim settlement performance. For the Vibration White Finger Scheme, Capita earned 42.5 per cent. of the bonus available over three milestones. For the Chronic Obstructive Pulmonary Disease (COPD) Scheme, Capita have to date achieved 100 per cent. of the bonus available from two of the three milestones.

The following table sets out Capita's performance under the SLA regime, which commenced in August 2006. The SLA measures listed are those that have been utilised over the contract up to February 2009.

Since February 2009, the arrangements have changed and whilst all criteria continue to be measured and monitored, the financial incentive is only in place for the COPD quality measure.

SLA

Description

SLA Performance (%)

SLA Incentive (%) Payment

Audited by PwC

Comments

COPD Quality

Representatives of Capita's Technical Team and PwC's Audit Team use a comprehensive scoring check list to verify the information Capita adjusters have used, on a random sample of claims. If an error is identified, whether it affects the final offer value or not, or whether the error results in a potential overpayment or underpayment, the SLA score is reduced.

97

91

Audited on a quarterly basis

Capita's actual SLA performance was over 97% but due to the effect of a quality sliding scale (NB. SLAs have different sliding scales), any decrease in performance accelerates the loss of payments achieved, so Capita obtained 91% of the SLA incentive payment. The reason why they achieved 97% rather than 100% performance is because Capita's Technical Team and PwC identified errors in the information.

VWF Quality

As with COPD Quality (above), the Capita Technical Team and PwC Audit Team use a comprehensive scoring check list to verify the information Capita adjusters have used on a claim.

99.5

100

Audited on a quarterly basis

Capita achieved 99.5% for performance, but due to the sliding scale, they obtained 100% of the incentive payments.

COPD and VWF Disputes

This SLA measures Capita's handling of COPD and VWF disputes within the timescales stated in the relevant Claims Handling Agreement.

99

97

Audited on a six monthly basis

Capita achieved over 99% for performance, but obtained 97% of the incentive payments. The slight drop in performance from 100% to 99% was because Capita did not deal with all disputes within the required timescale.

VWF Stalled Claims

This SLA measures Capita's handling of the Stalled Claims process: Stage 1 - trigger for stalled claims process Stage 2 - no substantive response received Stage 3 - No correspondence received since Stage 1 and 2

65

67

Audited on a six monthly basis

Capita's systems could not automatically report the 3 different stages of the stalled claims process with the additional complexities brought about by the exceptions applying to cohorts such as Grant of Probate and DWP Schedule, etc. As such, this SLA is potentially under-reported.

Keystage Data Accuracy

This SLA measures the accuracy of the indicators on Capita's IT system which shows where the claim is in the claims process (i.e. the key stage). It does not measure any other aspect of data accuracy.

90

71

Audited on a quarterly basis

Capita achieved over 90% for performance, but due to the sliding scale, obtained 71% of the incentive payments. The main reason why Capita achieved 90% rather than 100% performance is because the PwC auditors took their sample from all the claims including the very oldest claims which had not always been updated with new key stage indicators on the system.

Scan Post Received

This SLA measures the timescale that post received by Capita is electronically scanned onto their document management system.

100

100

Audited on a six monthly basis

No drop in performance. All post was scanned within the 3 days SLA timescale.

Complaints

This SLA measures the volume of complaints received by Capita (or expression of dissatisfaction in some way, or chasing for a response from Capita) as a percentage of the total volume of correspondence received by Capita in the same period.

1.2 of correspondence

55

Audited on a six monthly basis

An average of 1.2% of correspondence Capita received were classified as complaints. Many of the complaints were chasing letters (e.g. what is happening with the claim or when will we get a response) generated automatically on a regular basis by solicitors IT systems. Such correspondence did not take into account issues in the Court process that delayed the progression of claims. On the sliding scale, Capita achieved 55% of the incentive payments. For Capita to have been able to achieve 100% for this SLA, there would have to be less than 0.5% of the correspondence received as complaints.

Management Information Reports

This SLA measures the timescale to produce high priority and medium priority reports for the Department.

100

100

Not audited by PwC as this was monitored by the Department when reports were requested.

No drop in performance. The contract defined different timescales for different priority reports.

To ask the Secretary of State for Energy and Climate Change with reference to the answer of 12 November 2009, Official Report, column 669W, on industrial diseases: compensation, whether the terms of the contract between his Department and Capita Group plc allow his Department to levy fines on Capita Group plc. (303419)

The contract is designed to incentivise Capita to perform to a high standard, especially in terms of the quality and accuracy of claim offers and the timely settlement of claims. While the contract does not specifically mention the levying of fines, the comprehensive Service Level Agreement performance regime contained within the contract allows Capita to achieve a range of incentive and bonus payments. If Capita do not meet the targets, they do not earn the full amount available.

In addition to the incentive and bonus payments structure, Capita are required to reimburse the Department for not meeting the required timescale for payments to claimants which attract judgement debt rate of interest (JDRI).

To ask the Secretary of State for Energy and Climate Change with reference to the answer of 12 November 2009, Official Report, column 671W, on industrial diseases: compensation, what data were taken into account in his Department's value for money assessment of the contract with Capita Group plc. (303421)

In the context of the most recent retender of the Department's claims handling contract in 2005-2006, the value for money (VFM) assessment was made on both financial and non-financial measures. Data was taken from Capita's bid, references with other Government Departments and the Department's knowledge of the incumbent service provider and the associated contractual arrangements.

The financial assessment represented 40 per cent. within the scoring system. The non-financial assessment represented the remaining 60 per cent. as set out in my reply to my right hon. Friend on 12 November 2009, Official Report, columns 671W and 672W.