Jane Dudman: MyCSP's troubles paying civil service pensions show the danger of change for its own sake

There is much to learn from the MyCSP fiasco, which has caused a great deal of distress to people who have worked hard for the civil service

By Jane Dudman

18 Mar 2016

Remember this? “The coalition government’s vision for a Big Society is about taking power away from bureaucrats and supporting people on the ground to get on with the job. There are thousands of frontline public sector staff who can see how to do things better. I think this can become a real mass movement that will result in better services at less cost.”

These were, of course, the words of Francis Maude, then minister for the Cabinet Office, now Lord Maude of Horsham, in a speech during a visit to the Leatherhead Community Hospital in September 2010. Following the minister and his entourage around the hospital corridors and seeing him chat with the nurses and therapists, all working for the social enterprise Central Surrey Health, we journalists could certainly feel first-hand Maude’s enthusiasm for employee-owned organisations.

Back in those early days of the coalition government Maude was full of reforming zeal and was convinced that he’d be able to find millions more public sector staff, like those in Leatherhead, who wanted to own their own organisations. He would set these entrepreneurial spirits free, enabling them to set up their own mutuals and sell their services back to the public sector.

MyCSP: Civil service pension problems left officials facing "hardship & distress", says NAO
Civil service pensions: What's going on at MyCSP?
MyCSP pension payments delayed after mutual faces IT problems

It didn’t, of course, quite work out like that. By July 2014, there were 100 public service mutuals in England and Wales, employing 35,000 people. That’s not insignificant, but it’s nowhere near the millions of staff Maude had predicted would move out of the public sector and off the public payroll.

Worse still, only five years after that stroll ’round the hospital, one of the consequences of Maude’s enthusiasm for “spinouts” was laid painfully bare in a scathing report by the National Audit Office on the government’s flagship mutual project, civil service pensions body MyCSP.

MyCSP administers pensions for civil servants, with 1.5 million members, both current and former civil service staff. It was spun out of government, with much fanfare, on 29 April 2012 as an “independent mutual”. In September 2014, MyCSP brought in-house pension payroll and services previously provided by Capita. At the same time, it introduced a new pension administration IT system, Compendia.

The result was, as the NAO’s report makes clear, disastrous. When MyCSP ran the payroll for the first time in September 2014, 14,703 pensioners who lived overseas were paid late and 99 did not get their payment at all that month.

Would this catalogue of errors have happened if MyCSP had stayed inside government? There’s no reason to believe that being an employee-owned organisation contributed to the problems.

Worse, MyCSP could not then cope with the increase in calls and emails from distressed members. Between September 2014 and March 2015, MyCSP failed to answer 99,400 calls. Many of the members who were able to get through complained that the contact centre could not say when their request would be dealt with.

These problems led to a backlog of work at MyCSP, which did not have enough staff to process the 14,000 items of work inherited from Capita and the 40,000 data issues caused by migration of the system and requiring attention. By January 2015, the backlog peaked at 22,000 urgent cases. The backlog was cleared by March 2015, but the NAO says members did not receive the information they needed on time. In some cases, members who were waiting for a retirement quotation or new payment did not receive their quotation or payment until after they retired. Others could not get a statement of their entitlement to help them with their planning.

Would this catalogue of errors have happened if MyCSP had stayed inside government? There’s no reason to believe that being an employee-owned organisation contributed to the problems. In fact, that is slightly misleading: MyCSP staff own only 25% of the organisation. The Cabinet Office owns 24% but the majority stake, 51%, is held by private company Equiniti.

There is much to learn from the MyCSP fiasco, which has caused a great deal of distress to people who have worked hard for the civil service. The NAO makes it clear that problems continue with pension calculations, partly because the data being supplied by departments to the organisation is unreliable. That needs sorting out and isn’t MyCSP’s fault.

But the bigger question is about the danger of innovation for its own sake, without thinking through the full consequences. There are risks associated with change and those risks have a real impact on people’s lives.

The bit Maude forgot, or overlooked, back in 2010, in his hurry to move as many people as possible off the public books, was his own commitment to “supporting people on the ground”.

Without proper resources, support and careful planning, change for its own sake too often results not in the sunny uplands of innovation and creativity, but in overworked and demoralised employees. Ask probation staff, or the staff in the Rural Payments Agency and the Government Digital Service who have been criticised over changes to the rural payments scheme.

Whether staff work inside the civil service, for a mutual joint venture, or for any other kind of organisation isn’t the real issue here. It’s whether they are valued, supported and given the tools to do a good job.

Read the most recent articles written by Jane Dudman - Jane Dudman: Time to hear women’s voices in policymaking

Share this page