According to the Independent, business process outsourcing (BPO) and business process management (BPM) giant Capita is facing an investigation from the UK cabinet over claims that it used a major government contract to short-change smaller supplier companies.

This outsourcing news became apparent on Tuesday, after a group of 12 suppliers took a complaint to the Cabinet Office and demanded an investigation into Capita. Three years ago, Capita signed a £250m contract to provide all civil service training as a model of how to open up the public sector to smaller businesses.

Those smaller businesses have now revealed that Capita took a minimum 20 per cent cut of the value of all contracts to administer that civil service training scheme.

Francis Maude, the Minister for the Cabinet Office and Paymaster General, said in the House of Commons: 'We've learnt a lot of lessons from this contract... It should not be working like this. I'm aware of the concerns and we're investigating them very rapidly to get remedial action. It is not acceptable.'

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