The Cabinet Office has confirmed it is looking to take the civil service pension scheme back in-house following 'unacceptable' service levels by Capita, the private company running it since December. Retired civil servants have been failed by the outsourcing decision, with some waiting up to a year for payments and facing financial hardship, including inability to afford rent and reliance on food banks.
Backlog and delays affecting thousands
An estimated 17,000 relatives of deceased claimants are also facing financial hardship due to delays. The Guardian first flagged concerns in December, and MPs warned that Capita, which inherited a backlog from previous administrator MyCSP (part of Equiniti), was ill-equipped for the task. Among those affected are a 98-year-old widow who may need a bailout from her sons and a young widow forced to claim universal credit.
Nick Hitch, son of the 98-year-old, said: 'It took three months just to establish what application forms CSPS required. My mother has very few savings left and if CSPS continue to delay, my brother and I will have to support her financially within weeks.' After the Guardian contacted Capita, she began receiving payments and a lump sum for arrears.
Widow forced onto universal credit
Sarah Colhill, whose 57-year-old husband died last October, has been forced to claim universal credit due to delays in processing an £86,000 lump sum death-in-service benefit. She is sole carer for her disabled daughter and lives off her late husband's £110 monthly pension. 'Nine months on, Capita now say they won't release the money without a letter of administration, despite paying me my husband's pension and having all paperwork in February,' she said. 'As a direct result, I have been left in significant financial hardship and can no longer afford my rent.'
Government admits failure and plans insourcing
The Cabinet Office awarded Capita the £239m contract despite it having been stripped of contracts for Teachers' Pensions and Royal Mail statutory pension scheme due to delays. A public accounts committee report advised bringing the scheme back in-house. Earlier this month, Cabinet Office minister Nick Thomas-Symonds told parliament the scheme could be a 'prime candidate for insourcing in the future.'
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. This government is now drawing a line in the sand. We are looking beyond short-term fixes and actively shaping a long-term strategy to bring this pension scheme back in-house.'
Union and affected members speak out
Fran Heathcote, general secretary of the Public and Commercial Services Union, said: 'Capita has missed deadline after deadline, yet civil servants and pension scheme members continue to pay the price. Behind every delayed case is a real person dealing with uncertainty, stress and financial worry.'
Sally McEnhill and Christine Chalker (assumed name) lost their husbands last November and submitted claims immediately. Five months later, they were still waiting. Chalker said: 'Each time I called I was told delays were due to data migration. Then, weeks after being assured all information was in the system, I was told no forms had been received. Losing your partner is one of the most difficult experiences. The lack of clarity, communication and basic administrative handling has made it considerably worse.' McEnhill began receiving her £2,500 monthly pension after the Guardian contacted Capita, but Chalker still awaits an update.
Capita response and MyCSP statement
A Capita spokesperson said: 'We inherited a backlog of 90,000 cases from Equiniti and are working at pace to resolve them. We recognise the service has not been good enough, particularly for bereavement, retirement, and quotation cases, and we are sorry for the distress. We now have processes, automation and technology in place to work through the backlog.'
A MyCSP spokesperson said: 'MyCSP completed a comprehensive handover overseen by the Cabinet Office. All outstanding work items were fully disclosed, discussed and reviewed with Cabinet Office senior management prior to handover. Throughout its tenure, MyCSP consistently met service levels set by the Cabinet Office, as independently confirmed in the National Audit Office's assessment.'
