Civil Service Pensions

Mike Wood Excerpts

Monday 6th July 2026 Commons Chamber

[Mike Wood (Kingswinford and South Staffordshire) (Con)]

I thank the Minister for advance sight of his statement. Nobody in this House should be in any doubt about the anxiety and hardship being felt by retired public servants and the grieving families left stranded by this operational collapse. We are talking about more than 6,700 outstanding pension quotations and more than 4,100 unresolved bereavement cases. These are not mere statistics; they represent vulnerable individuals who have been left facing severe financial distress.

Let us be completely clear about where responsibility for this ongoing execution failure lies. The Minister can look backwards to November 2023 all he likes, but the critical transition phase, the data quality integration and the system go-live occurred on this Government’s watch and, more specifically, on his watch. The timeline of unheeded warnings is damning. Throughout 2025, both the National Audit Office and the Public Accounts Committee explicitly flagged that Capita was missing critical transition milestones and IT delivery targets, yet despite these clear red flags, the Cabinet Office chose to override the warnings, accepted flawed assurances and pressed ahead with the December go-live. The contract management failure belongs entirely to those on the Government Front Bench.

Alarmingly, despite the establishment of the Minister’s flagship pensions recovery taskforce, the situation is deteriorating in key areas. The Minister has just admitted that the backlog of MP complaints has grown significantly under his watch, going from 1,500 to more than 1,900 outstanding constituent cases since the end of April—barely nine weeks ago—and it is getting worse. Worse still, instead of focusing purely on immediate operational rectification, the Minister is using this crisis as an ideological springboard to flip to default insourcing. I am agnostic on whether the scheme is provided in-house or externally, but there is little in the Government’s record to suggest that they are capable of running this scheme any less incompetently than the current operators. Retired civil servants do not need a lecture on procurement ideology; they need their pensions sorted today.

The Minister must answer four specific questions. First, given that the Public Accounts Committee explicitly warned of the Capita IT system’s unreadiness last October, what independent technical verification did the Cabinet Office conduct before Ministers allowed the December go-live to proceed?

Secondly, the Minister noted that the 140-strong Government surge team are costing significant resource. Although he intends to recover the costs from the £9.9 million withheld from Capita, will he guarantee that any remaining funds will be legally diverted into an immediate compensation scheme for those affected and for grieving families who have suffered real financial detriment?

Thirdly, the Minister expressed deep frustration at Capita’s wider public sector footprint. The Procurement Act 2023 is fully active, and it established a centralised debarment list specifically to stop failing legacy suppliers winning further public work. Will the Minister commit at the Dispatch Box to formally referring Capita to the Debarment Review Service for investigation, or will he allow it to continue bidding for other contracts while he waits until 2027 to implement his insourcing reviews? If the threshold is not met in this case, where will the Minister consider it appropriate to use the powers that he has?

Finally, given the Minister’s conclusion that Capita has always been an unsuitable operator of the scheme, can he tell the House why the current Government chose to award Capita the new Department for Work and Pensions contract—not in 2023, but this February?

Public servants who have dedicated their working lives to this country deserve financial security and dignity. They have been let down by corporate failure, as the Minister says, but they are also being let down by this Government’s failure to manage the contract when it matters the most. It is time for the Minister to stop blaming the past, stop pitching future ideological tests, and finally fix the operational reality on the ground.

[Nick Thomas-Symonds]

I am quite astonished by the shadow Minister’s contribution. The House should be in no doubt that the previous Government signed a 10-year contract in November 2023. That is the situation we were left with, and I have been grappling with it throughout my time in office. The idea that I have put ideology above operational urgency is utter and total nonsense. I have intervened strongly at every single opportunity, and I have held Capita to account on its milestones time and again, to the tune of £9.9 million, in a way that the previous Government never did.

I have a lot more sympathy with the shadow Minister on his point about compensation. We have introduced a process to pay interest in respect of pensions paid by Capita from 1 December 2025, whereby full benefits are paid more than one month after retirement. The interest rate applied will be based on the Bank of England base rate plus 1% for the period of the delay between retirement and payment. That information has formally been published on a civil service pension website, and members will have the opportunity to ask for other losses to be covered as part of the complaints process. As for the rest of the shadow Minister’s comments, I think he will struggle to find anyone who has been as robust as I have been in holding Capita to account.