Civil Service Pension Scheme: Administration

Dan Carden Excerpts

Wednesday 4th February 2026 Westminster Hall

[Dan Carden (Liverpool Walton) (Lab)]

I congratulate my hon. Friend on securing this debate. We are told that a system of crisis payments has been put in place but I am still receiving correspondence from constituents, including this morning. They are terrified that they will not be able to pay their bills at the end of this month. My question is for the Minister at the Cabinet Office. What sanctions will be put in place to ensure that Capita acts, because my constituents are still being totally ignored?

[Lorraine Beavers]

This problem has a long history. Pensions administration used to be done in-house. In 2012, it was moved out as part of the wider push to outsource services. Over time, Government control was sold off and MyCSP came to an end in 2025. The new contract was awarded quietly, despite known pressures from rising retirements and major legal pension changes.

Those decisions need to be looked at closely. PCS has called for Capita to focus first on hardship cases, including unpaid retirees, people about to retire, ill-health cases and bereavement. It has also called for proper compensation schemes to cover interest, extra costs and distress. Those are fair and reasonable demands.

Capita and senior officials have apologised and promised recovery plans. Apologies matter but they are not enough. When people are left without income, through no fault of their own, action must follow. There must be clear responsibility, updates and deadlines. Hardship cases must come first and resources must match the size of the problem. People must be compensated for the harm caused.

I have five questions for the Government. First, will the Minister ensure immediate financial support and fair compensation for all those affected? Secondly, will she publish a clear recovery plan with proper oversight? Thirdly, will she ensure that Capita pauses voluntary exit schemes, increases staffing capacity and dedicates every available resource to clearing this huge backlog for retirees? Fourthly, will she review how this contract was handled, including whether the service should return in-house? Fifthly, will the Minister restate a simple promise: pensions earned through public service must be paid on time and with respect?

Before the general election, my party promised Britain the biggest wave of insourcing in a generation. This farce has exposed just how important that promise was and remains. I urge the Labour Government to make good on that promise. Civil servants give their working lives to this country in good faith. When that trust is broken, it is not just unfair to individuals, it is a failure of Government that this House must address.

--- Later in debate ---

[Ian Lavery (Blyth and Ashington) (Lab)]

It is a pleasure, as ever, to serve under your chairmanship, Ms Lewell. I congratulate my hon. Friend the Member for Blackpool North and Fleetwood (Lorraine Beavers) on securing this important debate. I declare my interest as a trade union member, and refer to the fact that I received support from the trade unions at the last election.

It is really important that we recognise who we are talking about: ordinary people, ordinary folk. Many of the people who we are discussing have worked in the civil service for many Government Departments and, shamefully, have been claiming benefits for years because their wages are that low. That is the vast majority of the people we are talking about. They brought us through the pandemic—let us not forget that. There are a lot of them in my constituency of Blyth and Ashington; I have a number of examples, which I am not sure I will be able to get through.

The root problem here, as my right hon. Friend the Member for Hayes and Harlington (John McDonnell) mentioned, is privatisation. The initial privatisation by the Tories was in 2012. It was initially DWP/Capita. Then it was MyCSP, which was a disaster. How on earth is Capita getting a secret contract agreed in 2023 to take place in 2025? It is an absolute outrage. Look at the situation now. They promised transition would be fine, but MyCSP had 16,000 unopened emails when Capita took the scheme back over. There are 1.7 million scheme members and a backlog of 90,000; there are 8,500 retired members not in receipt of any pension—and what about those in ill health and the bereaved? There is hardship, and there are issues with the interest-free loans that were promised.

[Dan Carden]

My hon. Friend is making a very good speech. Is it not important that this Labour Government show how they are different, and deal differently with those failed privatisations?

[Ian Lavery]

I totally agree with my hon. Friend. I will refer to three of my constituents. Mr Brown, from Bedlington, who retired in December and cannot get any response whatsoever to his inquiries. Mr Newell, who worked in the civil service for 40 years and has a number of questions regarding Capita, which I will send to my right hon. Friend the Minister. He spent 21 hours in total on the telephone waiting for a response, and he had additional problems. Mr Davies from Choppington raised a problem with the portal, where people cannot access details.

Those are three real issues. We need to pause the voluntary exit scheme and focus on those people who are not in receipt of their pensions at this moment in time. There needs to be more resourcing, with more staff employed to get rid of the backlog. Again, as my right hon. Friend the Member for Hayes and Harlington said, we need to consider whether Capita is carrying out the job it is supposed to. It is time to have a look at Capita and see whether it is doing the job correctly. If it is not, penalties must apply.