An evaluation in 2021 of the supply mannequin for the administration of the Civil Service Pension Scheme concluded that outsourcing was the “least risky” choice.
In a letter MPs printed on Tuesday, Cabinet Office everlasting secretary Cat Little has shared a abstract of the method that led to the decision in 2021 to proceed to outsource the contract after which to award it to Capita in November 2023.
The Cabinet Office has been questioned over its selection to outsource the contract given failures under MyCSP and the crisis that has unfolded for the reason that transition to Capita in December. Last month, Little shared the process behind deciding to push ahead with the transition in 2025 at a Public Administration and Constitutional Affairs Committee session.
At the identical session, Little was requested what components the division had thought-about when deciding whether or not it was higher to convey the contract in-house or outsource it. She advised MPs she would write to them with info on this.
In a letter to PACAC, despatched on 24 March however solely printed yesterday, Little stated the decision to outsource in 2021 “followed a Delivery Model Assessment in line with the Sourcing Playbook, which included an analysis of insourcing options”.
An annex to her letter on this course of says: “The decision to outsource the contract was made in 2021 as part of the Outline Business Case approval. To inform this decision, a Delivery Model Assessment was undertaken in line with the Sourcing Playbook, which included a cost, risk, and benefits analysis of options including insourcing. The assessment provided a data-driven indication that outsourcing provided the best opportunity to realise defined benefits with the least risk.”
It provides that the evaluation “led to a procurement process under the Public Contracts Regulations 2015. A series of detailed requirements were set out which were a significant enhancement to the previous contract. Bidders were assessed on past performance at the pre-selection stage, which Capita successfully passed. At the tender stage, bids underwent a technical assessment and a commercial evaluation based on price and value for money conducted by two independent teams. Capita was the winning bidder in line with the evaluation methodology.”
In the replace to PACAC, Little additionally set out Capita’s efficiency throughout 16 authorities contracts.
In Q2 of 2025-26, Little stated 90% of Key Performance Indicator information was rated as ‘Good’, and 5% as ‘Inadequate’. The insufficient rankings associated to the Recruitment Partnering Programme and the Teacher’s Pensions Scheme.
On the Civil Service Pension Scheme particularly, she stated the contract contains 21 KPIs topic to service credit.
“Capita has provided inadequate management information to date, but based on available data, the Cabinet Office maintains that Capita has failed the majority of these KPIs,” Little added.
Little stated the transition for the scheme was structured throughout 11 milestones and a ultimate Contract Performance Point (CPP), which is contingent on efficiency requirements. She stated seven milestones have been achieved and paid in full, one was partially met with an element fee, and three milestones stay unpaid. The ultimate CPP fee might be withheld till requirements are met, Little added.
Little additionally revealed that 646 loans had been paid out as of 10 March totalling £3.5m for individuals who haven’t acquired pension funds. She stated the Cabinet Office can be engaged on a standardised mitigation letter for members to share with lenders to clarify short-term monetary issue and is aiming to make this obtainable later this month.
