The Cabinet Office asked Capita to prepare for a work in-progress backlog of up to 100,000 cases several months before December's Civil Service Pension Scheme transition, it has emerged.
Permanent secretary Cat Little confirmed the instruction in a letter to members of parliament earlier this week, ahead of a Public Accounts Committee session this morning in which bosses at the outsourcing giant acknowledged they had received the advice.
Thousands of retired civil servants have been left without regular payments or lump sums in recent months, with the full extent of problems only emerging following the transfer of scheme administration from MyCSP to Capita.
Capita inherited a backlog of more than 80,000 cases from MyCSP on 1 December, compared to an expected handover of 37,000 cases that was agreed when it signed the pension scheme contract in November 2023. By early February, the backlog had risen to 120,000 cases.
Chris Clements, managing director of Capita Pension Solutions, told CSW this week that the firm could have planned for the transition better if there had been “more transparency” before it took over the contract.
In a letter to PAC, sent on Tuesday but only published yesterday, Little said: “Both the Cabinet Office and Capita knew that the volume of work in progress transferred by MyCSP would exceed the assumed 37,300 cases, and Capita was specifically instructed in July 2025 to prepare for volumes of up to 100,000.”
Little noted that this was reflected in Capita's own correspondence to the committee on 25 November 2025, in which the firm acknowledged that “the volume of the WIP left by MyCSP will be more than double the previously agreed figure of 37,000 items at the time of contract signature”.
Capita’s letter to PAC in November did not mention preparing for a caseload of up to 100,000.
However, at a PAC session today, Clements and Richard Holroyd, chief executive officer of Capita Public Services, told MPs they accepted the figure.
Clements said: “When we were told of the 100,000 referred to in Cat’s letter, we planned upon it being what I would call a normal – but large – work in progress. A normal work in progress would be four or five days of work for the operation. A large work in progress may be two or three weeks of work, and you work through that backlog. But no individual case would be older than maybe a month. And you would do the first in first, so you would keep that churning through. So that’s what we planned on and that’s the resource that we scaled up.”
Clements said that although Capita had recruited an additional 180 staff to deal with the anticipated volume of work-in-progress cases, the magnitude of the work involved was not apparent until go-live day on 1 December.
He said the firm had “inherited” a backlog of 89,000 cases, of which 13,000 had been waiting for more than a year.
“When we received the detail on taking over, we started to open the cases and see the ageing within the cases, we realised – when combined with the calls we were receiving – that these were much older. When you get an old case, the level of emotion attached to that case and the speed you have to deal with it is much higher.”
Holroyd told MPs Capita recognised the 100,000 figure Little referred to. “The issue is about the context of the backlog and the age of the cases and the complexity of the cases,” he said.
In her letter, Little said Capita had been “required to carry out a discovery phase with the previous provider, where they had the opportunity to ask questions about all aspects of the work-in-progress levels and prepare for taking over the service”. She said this was first carried out in mid-2024 “and no concerns were raised about work in progress at that time”.
PAC chair Sir Geoffrey Clifton-Brown asked Clements about Capita’s work on the discovery phase.
Clements replied: “We asked in writing for the details of not just the quantity but the nature, the age and the description of the cases. We were given a number of different downloads, a number of different lists. And each of those lists contained different information, none of which was exactly what we asked for, and we continued to go back and ask for additional information.”
Clements said Capita had not seen the true state of the backlog until go-live day.
“We wrote to the Cabinet Office on 10 December, informing them that what we had discovered in the real backlog was different to that described to us – and was going to mean that we had to surge additional staff and do additional measures to deal with it,” he said.
IT shortcomings
In her letter on 24 March, Little told PAC that Capita “did not deliver the full levels of IT, automation and portal functionality at go live” and that this “significantly impacted Capita's ability to manage the volumes of work inherited and the new work delivered since go live”.
She explained that the department “knew, and notified ministers, that there were shortcomings in the IT solutions but we were unable contractually to continue the service through MyCSP and the level of service from MyCSP was deteriorating”.
She said the situation was further challenged by industrial action at MyCSP beginning in June 2025, which reduced the contractor's capacity to process work and increased the final backlog. The department “implemented an exit plan but the legacy contract with MyCSP provided limited commercial levers to manage performance during their final months”, Little added.
In the letter, Little also acknowledged that there is “a difference of position regarding the scale of data errors at the point of transfer from MyCSP to Capita”.
She said MyCSP wrote to the Cabinet Office after Capita told the committee on 12 February that 20 million lines of corrupt data had been handed over.
“MyCSP stated it was aware of around one million data errors,” Little said.
She added: “While a large number of exceptions and potential data validations are to be expected on a data transfer of this volume, we are continuing to work closely with Capita on data reconciliation as a path to building full service recovery.”
Loans update
Little's letter responded to a series of questions asked by PAC chair Sir Geoffrey Clifton-Brown on 12 March.
Updating the committee on loans that have been given to people who are impacted by delayed payments, Little said that as of 17 March, 58 employers have reported issuing 769 loans with a total value of £4m.
Little said a further 76 employers are set up to issue loans if required, and 25 employers have confirmed they have no members currently in scope. She said the Cabinet Office will continue to follow up with the remaining 68 smaller employers to ensure all members in need can access support.
On the current deployment of 143 surge staff to help with the crisis, Little said this is “being kept under continuous review as part of our agile recovery process, and we will only begin to transition these resources once we are satisfied that the recovery is sufficiently robust”.
She said the final decision regarding the costs for these resources, along with any other costs, will be “determined based on the commercial negotiations”.
The perm sec also responded to a question from Clifton-Brown on what discussions senior officials in the Cabinet Office had had with Department of Work and Pensions officials about Capita’s performance ahead of DWP awarding the firm a £700m shared services contract last month
Little said: “The process followed a procurement under existing regulations. Prior to the award, the Cabinet Office shared lessons learned from the pensions implementation with DWP officials, and that department sought its own specific assurances from Capita before proceeding. Each contract is managed on its own merits with specific protections to ensure delivery.”