Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Government contractor Serco has been awarded a multiyear contract to boost recruitment across the UK’s understaffed Armed Forces, worth up to £1.5bn in a significant win following years of missed targets.
Serco announced on Thursday that it would be the prime contractor on a sweeping contract to run recruitment for the British Army, the Royal Navy, the Royal Air Force and Strategic Command, marking the first time that hiring for all of the forces will be managed by one privatised service.
It said the contract would be worth an estimated £1bn over seven years from 2027, or up to £1.5bn if it is extended for a maximum of three years.
The win extends Serco’s expansion into military contracting amid a rise in geopolitical tensions globally. The group in recent weeks announced a $247mn contract to support soldier fitness in the US and the $327mn acquisition of a US mission training business.
The deal is a blow for Capita, which has overseen Army recruitment since 2012 and started bidding for the new contract. The group, along with the Army, has repeatedly been criticised for missing annual recruitment targets as numbers dwindled.
“As global threats increase, we are making the changes necessary to get the brightest and best into Britain’s military,” said armed forces minister Luke Pollard.
“For too long, we have seen keen and capable prospective recruits failed by an outdated system, full of delays and inefficiencies.”
The government now wants potential recruits to receive a conditional response within 10 days and a training start date within 30 days of applying, he added.
Serco said it will be the lead contractor among a team of smaller suppliers, including marketing and health assessment groups.
Capita said: “We look forward to working with the successful bidder to ensure a smooth transition.”
Serco’s London-listed shares rose about 1 per cent on Thursday.
