By Reuters

(Reuters) - Outsourcing firm Capita's (CPI.L) shares fell more than 15% on Tuesday after the UK government withheld £9.9 million ($13.24 million) in payments for missing ​deadlines on a civil service pensions contract and accused ‌the company of failing to deliver on AI-led technology improvements.

The government move deepens pressure on UK-based Capita, which has increasingly relied on its

Calls have ​grown for Capita to be stripped of the contract ⁠after its system failures left 120,000 cases unresolved, UK Paymaster General ​Nick Thomas-Symonds said on Monday.

He said Capita missed its April and June ​deadlines to clear inherited pension arrears, with more than 6,700 outstanding pension quotations for past retirement dates and 4,100 unresolved bereavement cases still pending.

"We recognise the ​service has not been good enough, particularly for members waiting on ​bereavement, retirement and quotation cases," the UK-based company said on Tuesday.

Capita, which provides ‌support ⁠services to UK public and private sectors, said it now has the processes, automation and technology to work through the backlog.

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The government said on Monday it has begun appointing an independent auditor and remedial ​adviser to investigate ​the failures, while ⁠considering making the pension scheme a "prime candidate" for insourcing under its manifesto commitment.

Thomas-Symonds also accused the firm ​of failing to deliver on promises to create a ​flagship ⁠use case for the largest AI-enabled pension scheme in the country.

"It is clear that non-delivery of technology has been a fundamental part of Capita's ⁠inability ​to deliver," he said.

Capita's shares were last ​down 13.8% at 280 pence as of 0840 GMT, leading losses on the FTSE ​small-cap index (.FTSC).

($1 = £0.7475)

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