Artificial intelligence (AI) promises made to the government by outsourcer Capita failed to materialise, providing the “biggest learning” from an independent audit into the failed civil service pension project.
The audit, by Grant Thornton, has also revealed major failings by Capita related to its promises to fix the scheme, which has left thousands of former civil servants in serious financial difficulties. Cabinet Office officials now have access to the relevant Capita systems and will be watching “every single day”, said government minister Sally Jameson.
In a parliamentary statement, Jameson, parliamentary secretary in the Cabinet Office, said while Capita said it would be an AI-enabled pension scheme, that just was not the reality.
A government-commissioned independent audit of the Civil Service Pension Scheme (CSPS), carried out by Grant Thornton, was received by the officials this month. It has laid bare Capita’s tech failings on the project it began working on in 2023, before taking control in December last year.
“We were promised ‘the most AI-enabled pensions service’. It is fair to say that Capita has comprehensively failed to deliver on that commitment,” Jameson told MPs. “The progress overall has been abysmal.”
The full audit report won’t be published, although MPs on the Public Accounts and Public Administration and Constitutional Affairs committees will see it.
Jameson said the report concluded that, “in a service whose success firmly relied on automation, Capita did not deliver the promised technology”.
She added that it also found Capita “had not been applying the right techniques to understand demand, productivity and capacity, and that it had not put in place effective mechanisms to detect and escalate failure”.
The minister also slammed Capita’s recovery plans. “It will not shock this House that the independent advisor’s report clearly shows that Capita’s rectification planning was wholly insufficient, their technology was weak and their ambition was falling well short of restoring the quality services that members deserve.”
The revelations contradict Capita claims made in February that a backlog of work left by the previous supplier, MYCSP, was the cause of the problems with the scheme since Capita took control in December. However, Jameson did also describe MYCSP’s performance as “abysmal”.
Government sees data
Jameson said that from now on, the government will have full access to Capita systems related to CSPS and full sight of the data.
“I agreed with Capita executives that Cabinet Office officials would work with Capita to develop a credible, workable and realistic recovery plan for which Capita alone will be held to account,” she said. “I can confirm that for the first time, Cabinet Office officials now have full access to capital systems and data.”
Jameson said Cabinet Office officials will now be watching Capita closely “every single day”.
“I will indeed be holding Capita’s feet to the fire every single step of the way on this rectification plan, and now that we have access to the Capita systems, we’ll be able to look every single day, as I know Cabinet Office officials are, to track that progress,” she added.
The government will now publish figures to allow the public and members of the scheme a clear view of performance. Members have questioned figures put out by Capita that appear to contradict what is happening to them.
“Every two weeks, we will be publishing the figures so people can see for themselves how Capita are performing,” said Jameson. “If they’re not up to scratch, I will return to this House.”
As revealed by Computer Weekly in September, the government set up a team to validate Capita data on the CSPS.
Insourcing debate
MPs repeatedly asked the minister about government plans to insource the scheme and other outsourced work.
“We absolutely must improve these services going forward, which is why we are exploring in-house models,” said Jameson. “We want to have a big wave of insourcing, because we can no longer be totally reliant on these companies that let us down time and again.”
“Following our previous commitments to Parliament, my officials have led an extensive programme of engagement with trade unions, practitioners and experts,” she said. “The evidence from those sessions was clear: restoring operational resilience and member trust must be the approach. I have instructed my officials to evaluate the viability of a range of future delivery options, including insourcing all core business operations.
“There are a number of different insourcing models in operation across the public sector that we will learn from, and we will consider which is the best approach to take for the civil service pension scheme and all the other schemes that it interacts with,” said Jameson, stressing, however, that insourcing decisions must wait until all former civil servants have their pensions paid.
“This government inherited a broken, outsourced administration,” she added. “We cannot replace a complex pension operation overnight, but let me be clear: this government will hold Capita to account and continue to apply the most stringent commercial levers, and we will not rest until every civil servant receives the pension they are entitled to.”
Fix first
Former civil servant Steve Tessier, who spent most of his career at the Ministry of Defence (MoD), as well as a spell on secondment at Nato, is still waiting for his pension after retiring last year.
“I don’t want more flannel: after waiting a year since retirement, I just want my money,” he said. “I’m concerned that the minister tried to shovel all of the blame onto Capita, ignoring the significant failure of governance by the cabinet office that allowed capita to wreak havoc.”
The Civil Service Pensions Campaigns Group, set up to support scheme members, welcomed the acknowledgement of the seriousness of the crisis and the need for independent verification.
“Capita’s claims that the contract is back on track have been largely discredited by the evidence and experiences of members still awaiting pensions, accurate quotations and even responses to MPs’ enquiries,” the group said.
“The reported failures surrounding technology and AI implementation raise serious questions about Capita’s management of the contract and the Cabinet Office’s oversight. We expect the Grant Thornton findings to be fully scrutinised, with clear accountability for what went wrong and the consequences for members.”
The group said questions over insourcing is a matter for Parliament and the government, but “any decision to bring the service back in-house must be supported by a robust, properly resourced transition plan that protects members from further disruption.
“Behind the statistics are ordinary civil servants suffering real financial and emotional hardship. Capita’s failures must also be taken into account when considering future government contracts. Members cannot afford another failed transition – they need their pensions paid accurately and on time, not further promises.”
Earlier this month, Capita said in a statement: “Capita recognises the need for continued service improvement, and we are implementing further automation along with stronger governance including improved management information. This will continue to improve operational output and member experience.
“Capita accepts that performance remains below the standards that scheme members and the government rightly expect. The remediation of CSPS remains the group’s top priority.”
