June 18, 2018 / 4:15 PM / 3 months ago

Capita awarded UK defence ministry contract, beating Serco, union says

EDINBURGH (Reuters) - British outsourcer Capita (CPI.L) has been awarded a British Ministry of Defence contract to provide defence workers and firefighters, the Unite union said on Monday.

Unite said Capita had beaten rival Serco (SRP.L) although Capita was yet to officially confirm the deal and no one from the company was available for comment.

Capita which provides IT-led services for the public and private sector, is trying to pay down debt, boost investment after a period in which it took on more work than it could profitably handle.

The defence ministry contract would be a win for Capita’s new boss Jonathan Lewis who has just tapped financial markets in a 680 million pound rights issue.

However, Unite described the government’s decision to award the contract as “wrong-headed and alarming”, coming in the wake of the collapse of Capita’s service company rival Carillion earlier this year.

Carillion, a major government contractor, went into liquidation under the weight of poorly performing contracts and debt in January, prompting a period of reflection in the sector about how to adapt better to the changing business climate.

Reporting by Elisabeth O'Leary, editing by Andy Bruce and Michael Holden

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