The Cabinet Office has confirmed it is looking to take the civil service pension scheme back in-house following 'unacceptable' service levels from private provider Capita. The government admitted that retired civil servants have been failed by the outsourcing decision, with some left waiting up to a year for payments and facing financial hardship.
Financial Hardship and Delays
Multiple members of the scheme, run by Capita since December, have reported being unable to afford rent and forced to use food banks after losing their income. An estimated 17,000 relatives of deceased claimants are also facing delays in payments. Among those affected are a 98-year-old widow who may require a bailout from her sons, and a young widow forced to claim universal credit.
Sarah Colhill, whose husband died last October, has been waiting nine months for an £86,000 lump sum death-in-service benefit. She said: 'As a direct result of these delays, I have been left in significant financial hardship and can no longer afford my rent.'
Capita's Contract and Performance
Capita was awarded the £239m contract despite being stripped of contracts to run Teachers' Pensions and the Royal Mail statutory pension scheme due to delays. A report by parliament's public accounts committee had advised bringing the scheme back in-house since Capita missed key milestones during the two-year handover. The government initially expressed confidence in Capita but later conceded the company repeatedly missed targets.
In a statement, a Cabinet Office spokesperson said: 'Capita has failed to meet their critical end of June deadline, repeatedly missing recovery targets and delivering a service that is completely unacceptable to both members and taxpayers. This government is now drawing a line in the sand. We are now actively shaping a long-term strategy to bring this pension scheme back in-house.'
Union and Member Reactions
The Public and Commercial Services Union condemned the maladministration. General secretary Fran Heathcote said: 'Capita has missed deadline after deadline, yet civil servants and pension scheme members continue to pay the price for those failures. Behind every delayed case is a real person dealing with uncertainty, stress and financial worry.'
Sally McEnhill and Christine Chalker, who lost their husbands last November, faced months of delays. Chalker said: 'Losing your partner is one of the most difficult experiences anyone can go through. The lack of clarity, communication and basic administrative handling from CSPS has made it considerably worse.'
Capita's Response
Capita said it could not comment on individual cases but acknowledged inheriting a backlog of 90,000 cases from previous provider Equiniti. A spokesperson stated: 'Despite the progress made to date, we recognise the service has not been good enough, particularly for members waiting on bereavement, retirement, and quotation cases, and we are sorry for the distress and inconvenience experienced by those members. We now have the processes, automation and technology in place to work through the backlog.'
