Committee report vindicates PCS Pensions Administration campaign
The Public Accounts Committee concluded: “The Cabinet Office has not shown that it is able to effectively manage the outsourced administration of the civil service pension scheme.”
On 24 October, the House of Commons public accounts committee (PAC) published a damning report into the Cabinet Office’s handling of the privatised administration of the Civil Service Pension Scheme.
In its report, the PAC concluded:
“The Cabinet Office has not demonstrated it has sufficient capacity and capability to manage the MyCSP contract effectively and has now failed on two occasions to adequately manage the transition from one supplier to another.”
The PAC clearly believes that many of the problems experienced by pension scheme members, are caused by the Cabinet Office fundamentally lacking the ability to draw-up and manage these contracts with the private sector. The report goes on to confirm:
“The Cabinet Office accepts that the terms of the contract with MyCSP does not enable it to hold MyCSP to account for its performance…”
No real ‘market’
Neither is there a mature and vibrant market for pensions administration in the private sector. The report also states:
“There has been a small market of pension administrators bidding for the contract, potentially limiting the Cabinet Office’s ability to secure value for money for the scheme administration.”
Even the Cabinet Office recognises that the current ‘musical chairs’ involving a small number of Private Sector competitors, is causing major problems. The report makes it clear that:
“The Cabinet Office says that the market of pension providers is quite small, undermining its scope to encourage competitive procurements and obtain value for money for the taxpayer.”
All of this vindicates the PCS position. We have consistently argued that the administration of a pension scheme covering 1.7million current and former civil servants, with a potential liability of £189billion, should be staffed by civil servants under direct ministerial control.
Transition risks
The report also asks serious questions about the forthcoming transition from MyCSP to the proposed new contractor, Capita. The report finds that:
“There is a clear risk that Capita will not be ready to take over administration of the Scheme as planned on 1 December 2025.”
PCS particularly welcomes the recommendation in the report that:
“The Cabinet Office should set out…its overall commercial strategy for pension administration including consideration of the benefits and costs of administering the scheme in-house.”
Union recognition
The refusal by MyCSP to recognise PCS, leading to the current strike involving PCS members in the private sector contractor - a strike now approaching its seventeenth week - has also clearly drawn the attention of the influential select committee; as the report also recommends:
“The Cabinet Office should set out…what its approach is to ensure that suppliers that it contracts with are committed to giving adequate recognition to the voice of employees, for example, through union recognition.”
“Go/No-Go”
PCS has also had grave concerns about the shifting sands around whether the “go/no-go” decision regarding the transition to Capita had actually been taken.
The decision whether or not to proceed with the transfer was due to be taken at the end of September 2025; and unions were informed in early October that the decision had been taken to proceed.
However, within a matter of days, the Cabinet Office suddenly stated that no decision had been taken regarding the transfer; and even now, the select committee’s report makes it clear that, with only 25 working days to go before the scheduled transition to Capita, the Cabinet Office has still not made a final decision.
PCS response
In response to the committee’s report; Fran Heathcote, PCS general secretary, said:
"The public accounts committee report clearly shows that privatising the critical pensions administration function isn’t going to get you value for money.
“PCS believes this was inevitable when the scheme manager doesn’t have the capacity or ability to manage the contract, and there’s little or no competition in the market. This was just privatisation for privatisation’s sake.
"This damning report serves as further proof that the administration of the pension scheme should be staffed by civil servants under direct ministerial control.”