Capita hears demand for pension scheme cleanup 'loud and clear' – but won't say yes

Capita has yet to agree to reimburse the UK government for the full cost of recovering the failing Civil Service Pension Scheme (CSPS) it administers. In a testy Parliamentary hearing in which Capita was called to account for its performance since taking over the CSPS, Adolfo Hernandez, group chief executive, refused to be drawn on whether the company would pay the full amount that the government had invested in emergency support. Capita's CSPS went live in December last year, after which The Register exclusively revealed problems with its online systems. By January, it was clear the service was seriously failing, leaving some retired civil servants struggling to make ends meet. Capita won the seven-year, 239 million contract to oversee the CSPS in November 2023, taking over from MyCSP, which ran the scheme on behalf of the Cabinet Office under a 238 million contract first agreed in 2012. Speaking to MPs this week, Minister for the Cabinet Office Nick Thomas-Symonds said the government deployed 140 officials in a pensions recovery team on January 13, but was determined Capita would pay for it. "I will not have a situation in which public money is funding corporate failings, so I will fight relentlessly to ensure that we recover every single penny of the cost of the surge interventions from Capita," he told a joint meeting of the Public Accounts Committee and the Public Administration and Constitutional Affairs Committee. Later in the meeting, Angela MacDonald, Permanent Secretary and Deputy Chief Executive at HM Revenue & Customs, estimated the total investment in the government's recovery program, which includes 40 people beyond the surge team, would amount to 12.5 million for the 2026-27 financial year. Hernandez refused to say whether Capita would pay for any earlier spending in the previous financial year, which ended in April. "In the first place, we never intended to have a surge team," he told MPs. "I made a commitment to... the Cabinet Office that we would start picking it up from April." Aghast, PAC chair Sir Geoffrey Clifton-Brown, interjected. "Let me stop you there. The minister said that was completely unacceptable, and that you have to pick up the entire bill for the surge team from February, when it started." "I heard him say that," Hernandez replied. "We have not had that conversation yet. I made an offer." To the clear amazement of MPs, Hernandez plowed on. "There are a lot of decisions that need to be made; there are no isolated decisions," he said. "There are decisions that pertain to this particular investment. There are decisions about others. I think we need to have a commercial discussion and put them all together. I hear you loud and clear. I heard the minister loud and clear. I heard the permanent secretary loud and clear. I know what is being asked of us. When we sit around the table, this will be taken favorably, but we have not sat around the table." The meeting heard that Capita promised to get CSPS back to normal service levels by the end of June, a deadline it has now missed. The company told MPs it would return to normal service for all but the most complex cases by September. The government said it had penalized Capita 10 million in payments for its performance during the transition of the pensions service and was negotiating further penalties. Hernandez had earlier apologized for Capita's performance on the CSPS. (R)