The PCS union has raised concerns after the government awarded Capita a £700m civil service payroll contract.
The Department for Work and Pensions has named Capita as the preferred bidder to handle the payroll for more than 250,000 staff across some of the biggest government departments, PCS has revealed.
The union has branded the decision a “reckless gamble”, warning that any disruption to pay would have immediate consequences for civil servants who are already struggling to get by.
PCS's warning comes amid a crisis in the Civil Service Pension Scheme, now run by Capita, which has seen thousands of former civil servants go without pension payments in recent months.
The contract sits within the government’s “Synergy” shared services cluster, part of a wider strategy to collapse 286 legacy systems into five major platforms through a single cloud-based Oracle Enterprise Resource Planning system which covers HR, payroll, finance and procurement.
The departments covered by the contract are DWP, the Ministry of Justice, the Home Office and the Department for Environment, Food and Rural Affairs, and their agencies. DWP is the lead contracting authority for the Synergy Programme.
PCS general secretary Fran Heathcote said: “Capita is already at the centre of a pensions crisis that has left retired civil servants in distress. Privatisation is a failure, so why does the government continue to reward those responsible with yet another massive public contract?
“Ministers can see these crises unfolding in real time, yet they are prepared to place the pay of 250,000 serving staff at risk.
“PCS is calling on the government to urgently reconsider. Our members cannot afford missed or delayed pay because mortgages, rent and bills don’t wait. The government must guarantee that staff will not pay the price for contractor failure, which would have serious and immediate consequences for thousands of working families.”
PCS also warned the pensions crisis is not an isolated incident, noting that last year the Information Commissioner's Office fined Capita £14m following a data breach that exposed the personal information of millions back in 2023 and that in 2024, Capita achieved just 63% of its army recruitment target in its contract with the MoD.
A DWP spokesperson said: “We have delivered a robust procurement process, in line with government procurement regulations to identify a preferred bidder for the Synergy BPS contract.
"We stand ready to work with the successful bidder to ensure a smooth transition of service. Our priority remains to ensure continuity of service and value for money for the public.”
Capita has been approached for comment.