Capita, one of the UK’s biggest government contractors, said it was investigating an IT failure that left staff without access to systems and disrupted services provided to local authorities as well as some businesses.

The company, which provides IT and staff services to a number of UK government and public sector bodies including London’s Ministry of Defense and Transport, said on Friday it was investigating a “technical issue” with its systems, scope and its cause. .

The possibility of a cyberattack cannot be ruled out, according to two people familiar with the matter.

The problems appeared to be affecting Capita’s internal systems rather than client systems, but this could include Capita-employed staff working on behalf of public sector departments and companies, the people said. “It can affect them operationally,” said one.

London-listed Capita operates in both the public and private sectors, giving it a key role in vital services provided by the state, as well as call center support for businesses.

In a statement on Friday, Capita said: “Following a technical issue that affected access to some of our services today, we can confirm that we have identified an IT issue that primarily affects our internal systems. We are working to quickly restore affected services and will post a new update in due course.”

A Capita spokesperson said: “We would like to reassure customers whose services have been affected that we are making progress and working closely with our technical partners to resolve issues quickly.”

People familiar with the matter said the problems in Capita appeared to be related to apps linked to Microsoft 365, including Office apps such as email and video calls. Microsoft did not immediately provide a comment, but a broader outage to its 365 services does not appear to have been reported.

Businesses using Capita for UK call center services, including O2, were affected. O2 confirmed that there would be delays in some customer calls due to reduced capacity caused by the loss of staff employed by Capita.

Several local councils that outsource services, including South Oxfordshire, said they had been caught up in the disruption.

London’s Barnet Council, which uses the group’s staff in its call centre, said its phone line was down. Barnet Council said: “Our main customer service number is currently affected by the Capita IT issue. All other telephone lines of municipal services continue to work.

Barking & Dagenham council said that as a result of “a technical failure in our after-hours service systems, callers may experience slight delays in our being able to answer their calls over the weekend.”

He added in a statement on Twitter: “You may be aware that Capita, which provides some services to organizations/councils, is experiencing a cyber attack. ”

Capita has digitized many critical processes, including medical supply ordering and payment processing. It also helps the BBC collect the license fee and provides support services to GPs, dentists, opticians and pharmacists on the NHS in England.

The company has also been contracted by the Department for Work and Pensions to deliver Personal Independence Pay assessments, which are designed to help people with a long-term condition or disability lead independent lives through financial support.

A Cabinet Office spokesman said: “We are aware of an incident affecting some systems within Capita and are in regular contact with the company as they continue to investigate the issue.”

Shares in Capita closed down 4.2 percent on Friday.

Additional reporting by Tim Bradshaw and Jim Pickard