The Public and Commercial Services Union (PCS) has welcomed the government’s stance on bringing the civil service pension scheme (CSPS) administration in-house.
Plans to bring the Civil Service Pension Scheme (CSPS) administration in-house, amid the current problems under the stewardship of outsourcer Capita, are currently being worked on.
PCS general secretary Fran Heathcote met with Sally Jameson MP, parliamentary secretary in the Cabinet Office, yesterday (10 September), to discuss the government’s plans to rescue a failed outsourcing contract that has left retirees in financial hardship.
In July, the PCS demanded that the £239m contract to administer about 1.7 million pensions be brought in-house.
Since it took over the contract from previous supplier MyCSP in December 2025, Capita has failed to meet its delivery promises, and left claimants in severe financial difficulties. The company has admitted it is set to lose money on the contract, with pressure mounting on Capita, which is heavily reliant on public sector business, due to the government’s current insourcing plans combined with its much-publicised failures.
Heathcote told Computer Weekly: “I met with Sally Jameson MP yesterday to discuss the ongoing problems with Capita and it was a positive meeting. The minister confirmed that the government is looking seriously at bringing the service back in-house, something PCS has been calling for throughout this crisis.”
A Cabinet Office spokesperson told Computer Weekly previously that the government was “actively shaping a long-term strategy to bring this pension scheme back in-house”.
Jameson reconfirmed this in a statement to Parliament yesterday.
Inconclusive promise
Despite the seemingly unambiguous statement about the “long-term strategy to bring [CSPS] back in-house”, Heathcote said: “There is still work to do before a final decision is made, but I made clear that PCS wants to be fully involved and kept updated as this develops.
“Public services, including our pensions, should be delivered by properly resourced public servants, not outsourced for private profit,” she added.
“Capita’s failures have caused far too much stress and uncertainty for our members. Today’s meeting was a positive step, but we’ll keep the pressure on until we have a pensions service that people can rely on.”
Capita has a huge UK public sector client base. According to figures from Tussell, Capita currently has 199 public sector contracts worth a combined £7.9bn. Despite the CSPS failures, Capita won the Synergy Business Process Services contract in March, which, according to the official tender, has an estimated value of around £959m over 10 years. The contract supports back-office services for the Department for Work and Pensions, the Ministry of Justice, the Home Office, and the Department for Environment, Food and Rural Affairs.
But the government’s proposed biggest wave of insourcing in a generation will put pressure to perform on service providers such as Capita.
The firm set a target to process cases within key performance indicators from 30 September 2026.
Jameson said there will be a “substantive update” next month, following the conclusion of the technical audit and report from remedial adviser Grant Thornton.
‘Not good enough’
Capita said: “In the meantime, our focus remains on working through outstanding cases and improving the service members receive. Despite the progress made, 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 impact this has had on those members.”
There have been multiple PAC hearings since, featuring both Capita and the Cabinet Office, with reassurances repeatedly given to MPs that Capita would get the service to the expected levels.
During a joint PAC and Public Administration and Constitutional Affairs Committee (Pacac) hearing in July, Pacac chair Simon Hoare MP reminded Capita CEO Adolfo Hernandez and his colleagues of promises made to government during the contracting process. The Cabinet Office was told “that the two-year transition period would lead to the digital artificial intelligence revolution to deliver a world-class, world-leading pension service”, he said. “None of that met neither the novel nor the basic.”
In the meeting, Hoare asked: “Isn’t the stark issue, in essence, a company like Capita has the private parts of HMG [His Majesty’s government] very firmly in its grip?”
