HMRC’s second permanent secretary Angela MacDonald has been asked to lead a specialist team to help with casework backlogs following the Civil Service Pension Scheme's change of administration.
Civil Service World was informed yesterday that MacDonald, who is also HM Revenue and Customs’ deputy chief executive, is set to work with Capita on coming up with a formal recovery plan for the Civil Service Pension Scheme.
Outsourcing giant Capita took over administration of the pension scheme at the beginning of last month and says it has been left with a backlog of 86,000 cases from previous administrator MyCSP, when the expected number was 37,000.
Civil service union PCS this morning shared further insight on MacDonald's new role with the pension scheme.
The union published a letter from its general secretary Fran Heathcote to Cabinet Office perm sec Cat Little, sent on 19 January, which referred to the department telling unions in their most recent meeting that there are plans to set up a team, led by MacDonald, to “really get to know what’s gone on” and “to develop a recovery plan and to consider the choices that need to be made”.
In the letter, Heathcote called for the team to give “full and meaningful consideration to returning the physical administration of the pension scheme to the civil service”.
Unions have raised concerns about people waiting for months for pension payments, causing significant financial hardship including having to borrow money, struggling to meet mortgage obligations, and having to sign up for Universal Credit. Many CSW readers have been in touch to raise similar concerns since the scheme transferred over from MyCSP to Capita last month. The issues in many ways reflect those that occurred following the transfer from Capita to MyCSP in 2014.
In her letter, Heathcote said PCS is “gravely concerned about the current crisis facing the administration of the Civil Service Pension Scheme”. She pointed to comments from Little in July 2025 that “Capita has probably underestimated some of the complexity of the transition” and “we simply cannot afford for this transition not to go well”, describing them as “eerily prophetic”.
The Cabinet Office confirmed on 14 November that it had decided to go ahead with the transfer date of 1 December. Heathcote said in her letter to Little that unions were told at the time that the Cabinet Office was “confident" that on day one the service would be at least as good as one provided MyCSP.
Heathcote said the initial problems following the handover, such as key data not transferring over to the new portal, described by Capita last month as “teething problems”, have now worsened “into the realm of fundamental failure of the privatised service to deliver the primary function of the scheme administration – that is, to pay the pensions of retirees in a consistent and timely manner”.
She said the Cabinet Office has informed unions it is considering how to financially support staff who are suffering financial hardship because of the late payment of pensions. Heathcote said unions were "pleased to hear this". She called for these plans to be confirmed.
However, she said unions are still waiting for clarification and assurances on Capita’s planned resourcing to tackle the backlog, whether hardship cases will be prioritised, and how long the backlog will take to clear.
Heathcote said: “This fiasco is extremely distressing for those who have worked and paid into their pension all their working lives. PCS demands redress for the serious financial peril that many have been put in. Given the failures of the last contractor, and the current situation with Capita, we have serious doubts about the private sector’s ability to administer the scheme.
“We believe that this work should be run by the civil service, under ministerial control, so that it can be properly resourced and pensions paid on time. And we call on the government to make good on its promise of ‘the biggest wave of insourcing of public services in a generation’.”
A Capita spokesperson said: “At the time of contract signature, the volume of work in progress items left by the previous provider was agreed to be 37,000. Once we took over the scheme in December, however, we discovered that the backlog we were inheriting was in fact 86,000. As a result, we have experienced several times the normal volume of member queries since launch.
“Capita has over 500 full-time employees working to deliver the Civil Service Pension Scheme, an increase of 50% on the previous provider. Since the start of December, payments of over £763m have been made. Our teams are working tirelessly to clear the backlog we inherited and resolve member queries as quickly as possible. We sincerely apologise for the inconvenience caused to our members.”
CSW also sought a response from the Cabinet Office, which is responsible for the Civil Service Pension Scheme, but it had not provided one at the time of publication.