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Whistleblower tells Newsnight: Liberata knew they couldn't deliver in 2007
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A Newsnight investigation tonight on ´óÏó´«Ã½ Two at 10.30pm reveals that Liberata – the firm that has lost the Government's student grants contract – knew they "couldn't deliver the service" following their own investigation a year ago.
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Newsnight has spoken to former senior executives who wish to remain anonymous.
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They say that the company commissioned a senior executive to prepare a report on the status of the Education Maintenance Allowance project in October/November 2007 and that he "blew the whistle" and said the firm "couldn't deliver the service".
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A whistleblower says: "I believe they knew from the early days of the deal. I am aware that a senior colleague of mine presented a report stating the technical and non-technical problems he had identified and said they needed to employ more staff and make technical changes – this was in October 2007."
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Reporter: "So are you saying that a year ago Liberata were warned by a senior member that this could go off the rails?"
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Whistelblower: "Yes, I definitely am. The report he had put together made clear that in its current form the thing was not going to work."
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Other senior Liberata employees confirmed that the company had been told a year ago by their own people that they could not deliver the Educational Maintenance Allowance grants.
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The President of the Association of Colleges, David Collins, who represents sixth form college principals, was outraged that Liberata did not tell anyone.
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"There are hundreds and thousands of students who have suffered because of that. They should have owned up a lot sooner. I think if you could still shoot people at dawn it wouldn't be a bad thing to start doing."
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A senior executive told Newsnight that last year thousands of envelopes had been sent out to council tax payers with no council tax bill inside because Liberata had failed to produce the bills to deadline.
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Whistleblower: "In 2007 one particular local authority... the problem became so great that Liberata ended up sending to the post office for delivery of 10,000 – at least 10,000 – empty envelopes without any council tax bill in them."
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Reporter: "Are you saying Liberata sent out 10,000 empty envelopes?"
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Whistleblower: "Yes."
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Reporter: "How on earth did that happen?"
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Whistleblower: "It was to show local authorities they had produced enough bills – when they fell short they just sent out empty envelopes."
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Reporter: "Didn't anyone at any point – anyone senior say this can't be allowed to happen?"
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Whistleblower: "I am aware that one board member was warned that empty envelopes would have to be sent out and they said 'so be it'."
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A spokesman for Liberata said: "We can confirm that by mutual agreement of all parties that Capita will be taking over the LSC contract from Liberata.
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"Liberata will continue to provide outsourcing services and it is continuously focusing on improving the quality and efficiency of its service offerings to all of its clients."
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Liberata last week lost the contract it had for ten years with Sheffield Council.
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