MP committees to double up on Capita’s civil service pension crisis

Two Parliamentary committees will come together to look deeper into the failings associated with Capta’s takeover of the Civil Service Pension Scheme (CSPS).

The Public Accounts Committee (PAC) and Public Administration and Constitutional Affairs Committee (PACAC) have jointly invited Cabinet Office minister Nick Thomas-Symonds.

MPs in both committees will come together for a hearing on 7 July to “scrutinise problems” with the scheme that has caused financial difficulties for thousands of retired civil servants.

They look set to quiz the minister on the government’s termination of Capita’s Royal Mail contract. This was terminated due to “missed milestones” in contrast to the CSPS contract, which was retained despite warnings of missed milestones even before Capita took over the contract from MyCSP on 1 December 2025.

In October 2025, the PAC warned the government about the very same “missed milestone” issues in relation to Capita’s CSPS administration. Its report cited the missed IT milestones as reason for concern, among other things.

When Capita took over the £239m contract, which was awarded in 2023 in December, problems struck and an HMRC troubleshooter had to step in to lead an “urgent recovery plan”, amid difficulties following the transfer, in January this year. The PAC has already held two evidence sessions with Capita, while the PACAC has held one with the Cabinet Office.

The announcement of the joint committee hearing said: “Thousands of loyal and dedicated civil servants, and their families, are having difficulties drawing on and collecting their pensions.

“Likely topics [in the hearing] will include the government’s termination of Capita’s Royal Mail contract, what Capita and the government are doing to deliver the scheme back to acceptable service levels, and the overall future of the scheme.”

Read more: Was Capita’s Royal Mail pension contract a botch too far?

During a PAC committee 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 MyCSP.

MyCSP hit back in a letter to the PAC committee, with Duncan Watson, CEO at MyCSP, saying Capita did not take advantage of MyCSP’s 12 years’ experience administering the CSPS during its takeover, and its preparations for the contract switch – such as dress rehearsals – were inadequate.

The PCS union last week called for Capita to have its CSPS administration contract cancelled in the same way it has with the Royal Mail pension scheme.

The Royal Mail statutory scheme contract has annual revenues of less than £10m, according to Capita. The company, which has administered the scheme since 2018, said it “will continue to work closely with all parties to ensure continuity and a smooth handover in line with the Cabinet Office’s future alternative arrangements”.

According to figures from Tussell, Capita currently has around 230 live contracts with the public sector, worth £7.7bn. Its latest win is the decade-long Synergy Business Process Services contract, which, according to the official tender, has an estimated value of around £959m over the period. The contract supports back-office services for the Department for Work and Pensions (DWP), Ministry of Justice, Home Office, and the Department for Environment, Food and Rural Affairs (Defra). 

The controversy comes at a time that the government is looking to in-source more government work. Last month, Cabinet Office Parliamentary secretary Chris Ward said “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 in-sourcing in a generation a reality,” said Ward.