The backlog of pension claims has surged to a staggering 120,000, as officials aim for significant improvements by June. A minister from the Cabinet Office has announced that the government is committed to bringing the Civil Service Pension Scheme back to operational standards by mid-year.
Cabinet Office permanent secretary, Cat Little, disclosed that the number of pending cases has now reached an alarming 120,000. This news follows apologies from both the Cabinet Office and Capita—a company responsible for managing these pensions—who have acknowledged the distress many retired civil servants are facing due to delayed payments. To alleviate some of the financial strain, a temporary loan of up to £10,000 has been offered to those in dire need.
During a Westminster Hall debate regarding the pension scheme's administration, Cabinet Office minister Anna Turley expressed optimism about returning service levels to normal, particularly for cases involving death in service and ill health retirements, stating that these should be resolved by the end of February. She mentioned, "More broadly, our current plan is to work towards restoring most elements of the service to the expected standards by June." Turley also shared her personal connection to the issue, having a civil service pension herself, which adds a level of empathy to her role in addressing these concerns.
However, the situation has only worsened since Capita took over the contract in December, according to a letter from Little to the Public Accounts Committee. The backlog has grown larger, with approximately 90,000 cases passed down from the previous administrator.
Little remarked, "Capita’s slow processing of these cases has resulted in financial difficulties for some members, which is simply unacceptable.” It was noted last week that Capita inherited a backlog of 86,000 cases, far exceeding the anticipated 37,000 at the time the contract was awarded in November 2023.
In her correspondence, Little outlined multiple factors contributing to the existing crisis, such as Capita’s failure to meet key deadlines during a two-year transition period, alongside performance issues with MyCSP, the former manager of the pension scheme. These issues had already been flagged by the National Audit Office and the Public Accounts Committee in the previous year. Additionally, discord between the union, PCS, and MyCSP over union recognition, which led to strikes from July until MyCSP's contract ended, further complicated the transition.
Following the handover on December 1, Capita encountered significant challenges, including overwhelming traffic on their website and in their contact center. While the website issues were resolved quickly, call wait times remain excessively long due to the contact center handling three times the usual daily call volume—averaging around 3,600 calls compared to MyCSP's typical 1,300 calls per day.
Little highlighted other ongoing challenges since December 1, including Capita’s unexpectedly low levels of automation and incorrect assumptions about manual process productivity, as well as lingering issues from the previous administrator.
In response to these developments, PCS general secretary Fran Heathcote criticized suggestions that PCS members are to blame for the pensions crisis, stating, "It's misleading to imply that our members caused this issue. The problems with MyCSP existed long before any strike action and are rooted in failures related to outsourcing, poor contract management, and inadequate resources, as the NAO has pointed out.
Our members consistently raised these concerns and advocated for union recognition. Thanks to their efforts, the government is now acknowledging these issues seriously. They deserve gratitude, not to be scapegoated for problems stemming from government decisions."
