Civil service unions have known as for ministers to think about ending Capita’s contract to run the Civil Service Pension Scheme after the federal government introduced that the agency’s contract to run the Royal Mail pension scheme can be terminated.
Nick Thomas-Symonds, the minister for the Cabinet Office, instructed MPs yesterday he was ending the Royal Mail contract with Capita on account of “a failure to meet critical transition milestones and a lack of confidence in Capita’s ability to implement and transition to the new operating model in a timely fashion”.
In 2024, Capita gained a bid to resume its contract to manage the Royal Mail Statutory Pension Scheme for six years from 2026, with an choice to increase for an additional two years. Thomas-Symonds mentioned Capita was given an 18-month window to organize for the transition however didn’t ship quite a few milestones, together with failing to implement required IT automation.
“To ensure members are protected, we will ensure continuity of the existing contract, but let the message be clear: I will not and we will not tolerate delivery failure from contracted partners,” Thomas-Symonds added. “Public services require high-quality delivery, and public money should not be used to fund performance that falls short of the standards we expect.”
In his replace to the House, Thomas-Symonds additionally commented on the disaster within the administration of the civil service pension scheme.
He mentioned the supply of the service because the 1 December switch from MyCSP to Capita had “fallen far short of the required standard” and that Capita had failed to deliver on its assurances that the transition “can be dealt with with the utmost care and that any backlogs can be managed successfully”.
Thomas-Symonds mentioned the agency had been conscious of “the dimensions of the problem”, having been instructed to plan for up to 100,000 work in-progress cases in July 2025, “but failed to deliver the IT automation and portal functionality required when the service went live”.
The minister mentioned the Cabinet Office is investigating the respective liabilities for the transition failures between Capita and MyCSP.
Regarding the Capita contract, he mentioned the division has “taken direct action on all commercial levers… withholding milestone payments where deliverables have not been met, and we reserve every right to take further formal action”.
“Capita must clear all inherited arrears by the end of this month and restore service levels to standard, contractually required levels by the end of June this year,” he added. “We will continue to use every commercial lever at our disposal to ensure that these standards are met.”
‘These points have been happening for far too lengthy’
Responding to the minister’s remarks, PCS common secretary Fran Heathcote mentioned the choice to terminate Capita’s function within the Royal Mail pension scheme “sends a clear message which is this can be done”.
“When a contractor fails, contracts can and should be ended,” she mentioned. “The same must apply to the civil service pension scheme.”
Heathcote mentioned PCS has “consistently raised the alarm as civil servants and pensioners have been left in distress, facing delays and errors to the payments they rely on”.
“It is just unacceptable that that is allowed to proceed when a transparent different exists in bringing civil service pensions again in-house,” she added. “The authorities should now act with urgency, finish Capita’s contract, and forestall additional failure.”
Steve Thomas, deputy common secretary of Prospect union, mentioned the contract needs to be be faraway from Capita if it “continues to not deliver as promised”.
He mentioned: “The ongoing issues with the Civil Service Pension Scheme are completely unacceptable and are inflicting actual hardship for a major variety of current retirees and delayed the retirement of many others. These points have been happening for far too lengthy already and we have to see a speedy decision.
“The authorities has already opted to not give them the Royal Mail contract. It is turning into clear, if it wasn’t already, that outsourcing these contracts has been a catastrophic failure which ought to now be reviewed and work undertaken to evaluate the feasibility of bringing again in home.”
