The Cabinet Office has confirmed it is looking to bring the Civil Service pension scheme back in-house after outsourcing to Capita led to 'unacceptable' service levels, leaving 1.7 million retired civil servants at risk of waiting up to a year for payments. A Labour Party government report found that thousands of retired UK civil servants have been failed by the pension outsourcing arrangement.
Delays and Financial Hardship
Some retirees have waited up to a year for their pension payments. Additionally, 17,000 relatives of deceased claimants are facing financial hardship amid the delays. In June, Capita chief executive Adolfo Hernandez faced a grilling from MPs in a Commons committee hearing, where he reiterated apologies for delays in administering the 1.7 million-member pension scheme, leaving thousands of civil servants awaiting payments and retirement quotes.
Government Response and Insourcing Plans
A Cabinet Office spokesperson said: “Capita has failed to meet their critical end of June deadline [to meet agreed service standards], 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. While we will continue to apply robust commercial levers, including withholding payments, to hold them firmly to account, we are looking beyond short-term fixes. We have set out our intention to advance the biggest wave of insourcing in a generation, and we are now actively shaping a long-term strategy to bring this pension scheme back in-house.”
Union Criticism
The union’s general secretary, Fran Heathcote, stated: “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.”
Capita's Apology and Progress
A Capita spokesperson responded: “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.”
