Outsourcing giant Capita has been given the “final” go-ahead to take over as administrator of the Civil Service Pension Scheme from next month.
The firm was originally announced as the Cabinet Office’s chosen candidate to succeed current scheme operator MyCSP in November 2023, under a deal worth £239m over 10 years.
In July, Cabinet Office permanent secretary Cat Little told members of parliament’s Public Accounts Committee that Capita's progress with “transition milestones” built into its contract with the firm was a “significant cause for concern”.
She told MPs that there would be a final “go/no-go” decision on the transfer in September. The department subequently decided to push ahead with preparations for the transfer but postponed the timeframe for the final decision.
Three weeks ago, members of parliament’s Public Accounts Committee said in a report that there was a “clear risk” Capita would not be ready to take over administration of the pension scheme from the beginning of December.
In response, the Cabinet Office said it was “working closely with Capita to ensure a successful transition” from MyCSP. But it said a final decision to proceed with the 1 December handover had yet to be taken.
With less than three weeks to go, the department has now confirmed that the final decision has been taken that will allow the transfer from MyCSP to Capita to begin on 1 December.
Stakeholder groups are understood to have been informed of the decision on Wednesday.
A Cabinet Office spokesperson said: “We have reprocured the administration of the Civil Service Pension Scheme, with additional controls over the scheme to ensure performance for members.
“This remains a complex programme, and the Cabinet Office will continue to work with Capita to ensure the transition is a success.”
Transfer will deliver ‘best-in-class experience’
A Capita spokesperson said the firm is “looking forward to taking on and modernising the administration of the Civil Service Pension Scheme” and that it will work closely with the Cabinet Office to “ensure a successful transition”.
“We are proud to have been chosen to deliver this vital service, supporting more than 1.5 million current and former public servants,” the spokesperson said.
The firm added that it would be inheriting a “service in need of transformation”, but said it would be bringing proven expertise and modern technology to deliver “best-in-class experience” for scheme members.
An National Audit Office report earlier this year flagged a series of failings under MyCSP's administration. Civil service unions have been clear that service improvements for scheme members must be delivered as part of the Capita contract.
PCS, the civil service’s biggest union, has repeatedly called for administration of the Civil Service Pension Scheme, which has around 1.7 million members, to be brought back in-house at the Cabinet Office. Members of the union who work at MyCSP are currently striking over the employer’s refusal to allow PCS to represent them in their planned TUPE transfer to Capita.
In the wake of last month’s PAC report and the damning findings by the NAO in June, PAC chair Sir Geoffrey-Clifton Brown said it was time for ministers to “publicly take stock” of the case for outsourcing administration of the scheme.
“The costs and benefits of bringing the scheme back in-house must now be laid out,” he said. “Whatever route is taken in the future, the status quo has long clearly not been good enough.”
‘Capita needs to hit the ground running’
Adrian Prandle, assistant general secretary of the FDA union – which represents senior leaders in the public sector, said Capita would need to hit the ground running with a better service than CSPS members have been used to from the start of December.
“The FDA is ready to monitor the standards of service from 1st December – we will take any issues our members face straight to the Cabinet Office, who we will continue to be in regular contact with before, during, and after the transition date,” he said.
“There will be no period of grace for Capita as our members expect a hitch-free transfer and an immediate improvement in service – which is the bare-minimum following the repetitive failures of MyCSP.
“FDA members cannot afford to continue delaying life-changing decisions such as retirement or leaving the civil service – especially at a time when several departments face major reorganisation.”