Pension Schemes

Lord Gove Excerpts

Tuesday 28th April 2026 Lords Chamber

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

I thank my noble friend. There was I, about to say that, given his time in government and his extensive ministerial service across many departments, my noble friend knows better than I do about the awarding of these contracts.

There is a serious point here: at the heart of these conversations is the fact that every contract is managed on its own merits and contains robust, specific protections to ensure delivery. The award of the contract we are talking about followed a rigorous and transparent process under the public contracts regulations. The Secretary of State sought and received specific assurances from Capita regarding delivery after it had become clear what had happened to the Civil Service Pension Scheme. The DWP was alerted; obviously, there are members of staff at the DWP who will also have been affected by this.

It is fair to say, I think, that I have never had so many discussions with my colleagues as I have had with civil servants across the piece who wanted me to make sure that we fix this and fix it well, given my exposure to them. I am very grateful that my noble friend Lady Sherlock has come to be supportive; there are always effective cross-government communications when required, and I am pleased that my noble friend is sitting next to me for this one.

[Lord Gove (Con)]

My Lords, the noble Lord, Lord Reid, made a very valid point. Capita was the organisation in charge of Army recruitment. It did such a bad job that even the MoD decided to dispense with its services. The Ministry of Defence has long experience with Capita. Capita was the principal delivery organisation for the Defence Infrastructure Organisation, which was the most dysfunctional arm of that dysfunctional department.

It is not as though the Government have not been warned. As my noble friend Lady Finn pointed out, the Government have not learned what a truly dreadful organisation Capita has been. Yet now Capita is the preferred bidder for the Department for Work and Pensions’ Civil Service payroll contract. Indeed, only last month, Capita was selected for a 10-year contract, valued at £370 million, to run HR and finance systems for four UK government departments. When will Ministers and civil servants learn that Capita is no friend of efficiency or accountability?

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

The noble Lord is aware that I have been a fan for many years and would listen to him with interest on every position he takes. I do, however, find it a little rich, given the positions that he previously held, to be lectured by him about a contract that was signed by the previous Government, following many contracts, not least the ones he talked about in defence, that were signed by the previous Government. I have already talked about how we will seek to move forward with insourcing.

I should put on record the fact that I am an honorary captain in the Royal Navy and was a member of the Defence Select Committee when some of these issues were being discussed about the Capita contract and the impact it had on recruitment into our Armed Forces. I believe and hope, however, that Serco is going to benefit from some of the changes that we as a Government undertook with Capita on the defence recruitment contract, which moved to Serco last month.

At the heart of this are—as I think we are all aware—our responsibilities towards taxpayers’ money and making sure that it is spent well, and that, whenever we choose to outsource, it is because we need to bring in different expertise that is not typically appropriate for us to hold centrally. But we need to make sure that this works and works for us, and I hope we will see that going forwards. But Capita is a supplier in more than 80 government contracts.