PCS demands urgent meeting over Capita contract award

The Department for Work and Pensions (DWP) decision to award to Capita the contract for the ‘Synergy’ shared services contract – worth up to £950m over 10 years – could see Capita responsible for delivering payroll and HR services to more than 250,000 civil servants across the Department for Work and Pensions, Home Office, Ministry of Justice, and the Department for Environment, Food and Rural Affairs; as well as related arm’s length bodies.

Capita is currently failing to pay pensions to thousands of retired civil servants, leaving many without income and forcing government intervention. PCS has been inundated with reports from members about delays in processing, inconsistent information, and serious concerns about the quality of service.

In the letter, Fran writes, “It is nothing short of astounding to us, that a company with such an appalling track record, should be trusted with the vital payroll and HR functions for what amounts to almost half of the total number of staff working in the civil service.”

She points out that Capita has made multiple failures to meet transition milestones in the run up to taking up the contract; and since taking the helm, backlogs have increased, resulting in 150 operational civil servants having to be drafted-in, as part of an emergency recovery programme.

She also highlights other failings that Capita has made on public service contracts such as Army Recruitment and Teachers’ Pensions, as well as being the source of a data breach resulting in the Information Commissioner’s Office issuing the company with a £14 million fine, following a cyber incident that exposed the personal information of millions. 

Fran writes: “It is against this backdrop, that Capita has been selected by DWP to administer one of the most sensitive and mission-critical functions in the civil service: monthly pay and personnel administration. Any disruption to payroll would have immediate and damaging consequences for staff who are already under significant financial pressure, with many struggling to meet rising household costs. Pay delays cannot be dismissed as administrative inconvenience: mortgages, rent, and bills cannot wait.”

She points out that the awarding of this contract is difficult to reconcile with the Labour government’s ‘Make Work Pay’ commitment to the “biggest wave of insourcing of public services in a generation. "

PCS has been briefing MPs regularly on both the Capita civil service pension scheme fiasco and now the ‘Synergy’ contract award. This has led to MPs raising our concerns with Ministers and the issue being raised at a recent select committee hearing.

Addressing this in the letter, the general secretary said: “When the public administration and constitutional affairs committee recently raised their concern with the Cabinet Office about the decision to (at the time) select Capita as the preferred supplier, the Cabinet Office went to great pains to distance themselves from the decision; and to tell the committee that the decision was entirely a DWP one. That alone should, we would suggest, set alarm bells ringing for you.”  

We have requested an urgent meeting with the secretary of state for work and pensions to make our case for retaining and modernising shared services in-house, rather than outsourcing them to a contractor with a record of serious and repeated failures.

The PCS Parliamentary Group will also be raising our concerns with the minister.

PCS members are being asked to write to your local MP by using our new e-action.