Capita won disastrous UK pensions gig after acing performance checks

How the contract was awarded

It has been reported that the Cabinet Office awarded Capita a £239 million, ten‑year contract to run the Civil Service Pension Scheme after a procurement process that rated the bidder highly on past performance, technical capability and value for money. Catherine Little, the Cabinet Office permanent secretary, told MPs in a letter that bidders passed a pre‑selection stage assessing past performance and then faced separate technical and commercial evaluations carried out by two independent teams. The decision to outsource — chosen in 2021 after an Outline Business Case and a Delivery Model Assessment — concluded that outsourcing offered the best chance to realise benefits with the least risk.

A glitchy launch, a big backlog

But the rollout did not go to plan. It has been reported that a December portal launch left thousands of retirees waiting for payments and that the Commercial and Public Services union called the episode a "fiasco," with around 8,500 newly retired civil servants allegedly delayed. Capita says it inherited a backlog — reported at roughly 86,000 cases from MyCSP — and initially expected a transfer of about 37,300 cases before being told in July 2025 to prepare for up to 100,000. Richard Holroyd, Capita Public Services CEO, told the Public Accounts Committee that while the company was warned about growing volumes it lacked a clear picture of case complexity and the age of outstanding work, which hampered backlog clearance.

Accountability, fixes and the wider question

Little admitted the service "did not meet expectations," singling out unacceptable bereavement call handling and saying she had escalated at least one case for urgent action; Capita is investigating, and the Cabinet Office says it will deploy government surge staff after finishing training. So what went wrong? The emotional core here is simple and sharp: people in vulnerable moments were left waiting. The episode underscores a wider tension — robust-looking procurement checks do not always capture the operational mess tucked inside inherited backlogs — and it raises familiar questions about whether outsourcing remains the right tool for critical public services.

Sources: The Register