Capita, the company behind the botched Criminal Records Bureau scheme, has said negotiations to renew its contract with the government are “progressing well”.

This is despite a string of administrative foul ups and the announcement last week that charges for CRB checks were due to increase.

The CRB was introduced to screen teachers and nurses for sex offences and other convictions.

But it has been dogged with administrative problems since its inception a year and a half ago.

Teachers faced serious delays waiting for their checks to be processed and the government announced last week that prices were to rise by another £3, bringing top-level audits to £33 each.

Details of the contract Capita has with the government are top-secret but it has been reported that the firm had to pay the government compensation because of the problems.

However, Home Office figures have shown that the service has improved in recent months.

A company spokesman said: “Negotiations with the Home Office on our contract involving the Criminal Records Bureau have progressed well and will be concluded by the end of December.”

Capita has won contracts worth £615m this year and is working on bids potentially worth £2.4bn.

A trading statement released to the London Stock Exchange added: “We are positioned to continue growing in 2004, with a significant proportion of revenue growth now underpinned.”

But investors were unimpressed by the news – shares in the company dropped by three points to £2.40 each in morning trading following the announcement.