Civil Service Pensions: Capita

Lord Pack Excerpts

Thursday 5th February 2026 Lords Chamber

[Baroness Anderson of Stoke-on-Trent (Lab)]

My Lords, I think many of us have had different experiences with Capita in different contracts over time. I fear that I may be on the record not calling it “Capita” in other parts of Parliament. Specifically, noble Lords may be aware that the Public Accounts Committee in the other place raised concerns about this contract last summer and therefore a whole series of assurance reviews were undertaken and put in place. There are ongoing issues about what has happened and how it has happened, but the priority at this point has to be how we prioritise those who are waiting for deferred salary, but also, at the most extreme end, people who have died in service and who have taken ill-health retirement. To reassure noble Lords, the recovery plan expects that those cases will have been caught up and dealt with by the end of this month, and the hardship loans have started to be paid this week.

[Lord Pack (LD)]

My Lords, the Cabinet Office told the Public Accounts Committee last year that it was aware of very significant problems with Capita’s preparations to take over the contract on 1 December and that the Cabinet Office had a contingency plan ready to use if necessary. Why, therefore, did the Cabinet Office decide to go ahead with the 1 December transfer to Capita rather than invoke its contingency plan?

[Baroness Anderson of Stoke-on-Trent (Lab)]

My Lords, the noble Lord is absolutely right that this was discussed by the Public Accounts Committee last year. Following that, and the assurances we got before it went live, the Paymaster-General met with Capita and it confirmed 194 full-time equivalent staff put in place to mitigate delays in automation testing, contingency plans and triaging arrangements, and then a series of independent assurance reviews were undertaken in advance. That is not to say that there are not now serious concerns about what has happened in the last month.

To be clear, our priority at this point is fixing what is broken and making sure that the system stands up. This is a very complicated pension system: it is the third-largest in government. However, I am sure that there will be numerous opportunities to discuss what went wrong and what we need to learn from this. But I want to assure noble Lords that we are taking this with the utmost seriousness, which is why Angela MacDonald, the Second Perm Sec at HMRC, is leading the recovery taskforce. There is a 150-person government surge team supporting the Capita contract, and we are working with Capita and meeting it every day to make sure that these KPIs are being met.