Civil Service Pension Scheme Backlog Reaches 120000 Cases as Minister Targets June Recovery

The Cabinet Office has confirmed that the backlog affecting the Civil Service Pension Scheme has escalated to approximately 120,000 cases, representing a substantial increase since Capita assumed administration of the scheme in December. Cabinet Office minister Anna Turley has indicated that the government aims to restore most elements of the pension scheme to required service levels by June this year.

During a Westminster Hall debate on the administration of the scheme, Turley stated that the government expects to restore service levels for death in service cases and ill health retirement cases by the end of February. She confirmed that current planning involves bringing most aspects of the service back to expected service levels by June, whilst noting that the government will maintain constant review of progress and seek opportunities for acceleration.

The disclosure regarding the backlog’s magnitude came through a letter from Cabinet Office permanent secretary Cat Little to the Public Accounts Committee, published earlier this week. Little revealed that the work in progress backlog, which includes approximately 90,000 cases inherited from the previous administrator, now stands at around 120,000 cases. She emphasised that Capita’s inability to process these cases at sufficient pace and volume has resulted in some members experiencing hardship through non-payment of pensions due, describing the situation as unacceptable.

The figures represent a significant deterioration from previous estimates. Last week, the Cabinet Office stated that Capita had inherited a backlog of 86,000 cases, contrasting sharply with the expected handover of 37,000 cases from MyCSP when the contract was signed in November 2023. The Cabinet Office and Capita have jointly apologised for the crisis, which has left thousands of recently retired civil servants without pension payments in recent months, and announced a loan facility of up to £10,000 for those experiencing hardship.

Little’s letter outlined several contributing factors to the current crisis. These include Capita’s failures to meet milestone deadlines during the two year transition period and issues with MyCSP’s performance, which had been flagged by the National Audit Office and Public Accounts Committee during the previous year. She noted that these problems were further exacerbated by the dispute between the PCS union and MyCSP over union recognition, along with strike action that took place from July until the end of the MyCSP contract.

Following the handover on 1 December, Capita encountered operational difficulties including high volume traffic on the website and contact centre. Whilst website issues were resolved within several days, the contact centre continues to experience more than three times the expected volume of daily calls, resulting in extended wait times for members. Capita currently receives an average of 3,600 calls per day, compared with MyCSP’s average of approximately 1,300 calls per day.

Additional challenges identified since 1 December include Capita’s lower than expected levels of automation, misjudged assumptions regarding productivity for manual processes, and knock on impacts from historic issues with the previous administrator. HMRC deputy permanent secretary Angela MacDonald, who is leading a taskforce to tackle the backlog, attended the Westminster Hall debate alongside Little.

PCS general secretary Fran Heathcote disputed Little’s characterisation of events, stating that it is misleading to suggest PCS members caused the civil service pensions crisis. Heathcote asserted that problems with MyCSP long predate any strike action and stem from outsourcing failures, poor contract management and under resourcing, as highlighted by the National Audit Office. She argued that PCS members raised these issues repeatedly and fought for union recognition, and that partly as a result of their success, the government is now taking their concerns seriously. Heathcote contended that members should be thanked rather than scapegoated for a crisis created by government decisions.

Turley, who noted her own civil service pension stemming from a career that began at the Home Office in 2001, emphasised the government’s commitment to resolving the crisis and restoring service standards to acceptable levels.