The UK government has awarded Capita a significant contract worth £239 million to manage the Civil Service Pension Scheme (CSPS). This decision followed a performance assessment, despite previous issues during the rollout that impacted payments for numerous retirees.
Contract Award and Evaluation Process
Capita was selected after passing a pre-selection stage, where it received high marks for providing a “good” and “inexpensive” service. Two independent government teams conducted both a technical assessment and a commercial evaluation focusing on price and value for money.
Catherine Little, the permanent secretary at the Cabinet Office, detailed this process in a letter addressing Members of Parliament (MPs). The contract, effective for ten years, aims to serve approximately 1.5 million former and current public servants.
Issues in Service Rollout
- A problematic portal launch in December 2022 hindered timely payments.
- According to the Commercial and Public Services union, this situation caused “fiasco” delays affecting about 8,500 newly retired civil servants.
- Capita inherited a backlog of 86,000 cases from the previous provider, MyCSP, which included overdue cases.
Despite the challenges, Little maintained that the decision to outsource was driven by an “Outline Business Case” demonstrating potential benefits and risk mitigation. The decision to outsource was made in February 2022 after thorough evaluations.
Performance Metrics and Expectations
Following the contract award, Capita was initially tasked with managing around 37,300 cases. However, by July 2025, they were directed to prepare for a potential increase to nearly 100,000 cases. CEO Richard Holroyd acknowledged receiving warnings about the increased case volume but lacked sufficient understanding of the complexity involved.
Performance data from the Cabinet Office reveals mixed results for Capita. In the second quarter of the most recent financial year, 90% of Capita’s Key Performance Indicators (KPIs) were rated as “good,” while 5% fell into the “inadequate” category. Nevertheless, Capita has reportedly struggled to meet many of its KPIs concerning the CSPS, as highlighted by Little.
Government’s Response and Future Steps
Little pointed out unacceptable constituent experiences, especially in handling bereavement calls. An investigation into specific cases has been escalated to ensure timely action is taken.
To improve service capacity, steps are underway to finalize training that will enable government surge staff to assist in this area by the end of March 2023.
