Civil servants will demonstrate at Capita’s annual general meeting, demanding the supplier to be stripped of the pension administration contract.
The Civil Service Pension Scheme (CSPS) administration, which manages the pensions of 1.7 million current and former civil servants, has been in chaos since Capita took over the contract in December.
The Public and Commercial Services (PCS) union is calling on members and supporters to gather in Sheldon Square, London on the morning of May 18 to demand the government end Capita’s contract and bring the work in-house.
On 1 December, Capita formally took over the CSPS from MYCSP after winning the contract in 2023, when the Cabinet Office awarded Capita a seven-year contract worth £239m.
Despite an 18-month period to prepare for takeover, there were warnings that Capita would not be ready at the take-over date. The harshest warning came from MPs in a report from the Public Accounts Committee (PAC) in October, which said there was a “real risk” that Capita would not be ready to take over the administration of the scheme on time. But Capita hit back claiming this was inaccurate and “not reflective of the current state of the transition”.
Capita took over on time, but the government was forced to bring a troubleshooter in from HMRC to lead an “urgent recovery plan” by January as the pension scheme experienced difficulties. This included an additional 150 Capita staff and short-term financial support for people suffering hardship.
At the time, Capita said that it expected to restore service levels for the most urgent cases by the end of February. But the service is still experiencing severe difficulties with civil servants left in financial hardship. Problems have seen thousands of civil servants face financial hardship because of severe delays in receiving their pensions.
In a PAC hearing in February, Capita said it was “overwhelmed” by around 16,000 unread emails and 20 million database errors unexpectedly left to it by the previous administrator.
But in a letter last month, Duncan Watson, CEO at the previous administrator MyCSP, hit back. He told MPs, among other things, that Capita did not take advantage of MyCSP’s 12 years’ experience administering the scheme, and that the incoming supplier’s preparations for the contract switch, such as dress rehearsals, were inadequate. The PCS union had been encouraged that its demands to bring the service in-house could be achieved after the Government ditched Capita from the Royal Mail Statutory pension scheme contract.
The reasoning for Capita being dropped from the contract was, according to the Cabinet Office, its “failure to meet key delivery milestones”.
Cabinet Office minister Nick Thomas-Symonds went further. “Capita had an 18-month planning window to prepare for the transition,” he said. “They failed to deliver numerous milestones, including a failure to implement the required IT automation. The Cabinet Office repeatedly flagged delays in transition milestones.”
Back in October 2025, when PAC warned the government about the very same “missed milestone” issues in relation to Capita’s CSPS administration, the government took a different approach.
The PCS union is also energised by Cabinet Office Parliamentary secretary Chris Ward’s claim in February that “the age of outsourcing will end”, and announced plans to in-source services.
“For decades, successive governments have been, at best, ambivalent about whether public services are delivered in-house,” he said. “At worst, we’ve had outsourcing by default, with public services hollowed out and sold off to the lowest bidder. That era ends today.”
The government introduced a Public Interest Test, requiring all departments to assess whether a service can be delivered more effectively in-house before any outsourcing decision is made. This will apply to service contracts of £1m and above, covering over 95% of central government spend.
“All departments must also publish insourcing strategies to make the biggest wave of insourcing in a generation a reality,” said Ward.
