Committee publication · Report · 24 October 2025 · HC 888
49th Report - Administration of the Civil Service Pension Scheme
From: Public Accounts Committee
Inquiry: Civil service pensions
Government response deadline: 24 December 2025
Summary
The Public Accounts Committee examines the Cabinet Office's administration of the Civil Service Pension Scheme (1.7 million members, £189 billion liability) through MyCSP and the planned transition to Capita in December 2025. The report criticises severe customer service deterioration, inadequate staffing plans for transition, unacceptable delays in processing McCloud remedy cases (some members waiting until 2027), weak contract management by the Cabinet Office, and significant delivery risks with Capita's IT systems.
Key findings
- Customer service has collapsed since October 2023: only 8% of calls answered within 30 seconds in January 2025 (target 80%), average wait time 24 minutes, complaints up 43% since 2016–17, call abandonment rates near 30%.
- MyCSP staffing declined 11% between October 2023 and January 2025; Capita plans 33 fewer staff (299 vs 332) despite needing to maintain service, as promised IT automation has been scaled back to a simplified solution.
- Over 400,000 members affected by McCloud remedy; 53% of pension-drawing members still waiting for Remedial Service Statements; Cabinet Office aiming to reach all members by March 2027 (six years after remedy programme began), with no supplier yet chosen for remaining work.
- Cabinet Office failed contract management: only £260,000 in fines applied against £238 million total MyCSP contract value despite poor performance; this is the second failed supplier transition, mirroring service drop-off during 2014 Capita-to-MyCSP handover.
- Capita has missed 7 of 8 transition milestones; Cabinet Office withheld £9.6 million in transition payments; no contingency agreement with MyCSP to maintain existing systems if Capita's IT fails; go/no-go decision planned for September 2025.
- PCS union recognition dispute: MyCSP refuses to recognise PCS for collective bargaining; strike action announced June and August 2025; staff shortages partly caused by contract award uncertainty and turnover rising from 12% to 24% in 2024.
- Pension administrator market highly concentrated; only a small pool of bidders; Cabinet Office reviewing market resilience but acknowledges limited competitive options; insourcing generally more expensive than outsourcing due to transition costs.
Recommendations
- Cabinet Office must explain in Treasury Minute how it has assured sufficient resources for scheme administration from 1 December 2025 in both successful and failed IT transition scenarios.
- Cabinet Office must set out its plan for remaining McCloud remedy members, including timelines and supplier selection for work beyond MyCSP.
- Cabinet Office must detail how it will ensure appropriate commercial capacity and contract management skills to hold administrators accountable, and what measures it will implement to ensure adequate customer service during supplier transitions.
- Cabinet Office must set out its approach to ensuring contractors are committed to employee voice and union recognition.
- Cabinet Office must fully develop contingency plans should Capita be unable to take over on 1 December 2025, and provide the Committee with an update immediately following the go/no-go decision.
- Cabinet Office must set out its overall commercial strategy for pension administration including consideration of in-house delivery benefits and costs.
Tone
CriticalTopics
public-financepensions-administrationcontract-managementpublic-service-deliveryemployment-relations
Key actors
Cabinet Office, MyCSP, Capita plc, PCS Union, Civil Service Pensioners Alliance, Sir Geoffrey Clifton-Brown (PAC Chair), Cat Little CB (Cabinet Office COO/Permanent Secretary), Duncan Watson (MyCSP CEO)
Notable line
“… this is the second time the Public Accounts Committee has seen the Cabinet Office fail to manage the successful transition from one administrator of the Scheme to another without a drop in performance levels during that period.”
Key Quotes
“Since at least 2023, customer service levels have been unacceptable as MyCSP has struggled to retain sufficient staff numbers.”
“More than half of members who are drawing their pension and affected by Remedy are facing unacceptable waits until as late as 2027 to have their pension options set out for them.”
“For example, despite MyCSP's mixed performance record, the Cabinet Office has only successfully applied two fines of total value of around £260,000 over the course of the contract, against a total contract value of around £238m.”
“… from 2017 to 2024 callers were waiting for an average of just three minutes.”
“… it had expected fewer staff to be required as increased automation and technology would enable Capita to operate with less resource.”
“This is a positive development and underlines the importance of employers who supply contracts to government engaging meaningfully with unions including through formal recognition.”
“… in the worst-case scenario it plans to continue with MyCSP's existing systems, however currently there is no agreement with MyCSP to keep its digital systems in place.”
Source · parliament.uk record ↗