PARLIAMENTARY DEBATE
Civil Service Pensions - 6 July 2026 (Commons/Commons Chamber)

I want to provide the House with an important update on the administration of the civil service pension scheme. Capita was awarded this contract in November 2023. It had two years of transition to prepare, and its senior leadership gave me explicit personal assurances ahead of the handover that they were fully capable of managing the workload and that they were ready for a successful transition. Indeed, the chief executive promised that technological improvements would create a flagship use case for the largest AI-enabled pension scheme in the country. It is clear that non-delivery of technology has been a fundamental part of Capita’s inability to deliver. The reality is that it was completely unprepared and its system was overwhelmed, which resulted in a backlog that skyrocketed to a staggering 120,000 unresolved cases.

In response, I intervened immediately and established the Cabinet Office pensions recovery taskforce. Capita committed to two critical recovery targets: an end of April milestone to clear the inherited arrears, and an end of June milestone by which point it promised a complete return to standard contractually required levels. Capita missed its own April milestone. The end of June deadline has arrived, and I regret to inform the House that Capita has failed to meet that milestone, too. Seven months on from taking over operations, too many pension scheme members still face unacceptable delays after years of dedicated public service.

Since my last statement on this matter, thousands of quotations have been issued and pensions put into payment. Capita had committed to clearing the quotes backlog by today, but I am afraid that the reality remains very different. As of the end of June, there are still more than 6,700 quotations outstanding for past retirement dates, and more than 4,100 bereavement cases on which Capita could take action. These are the most harrowing stories, affecting devastated scheme members and grieving families. My officials have forcefully escalated those systemic back-office failures directly to Capita’s senior leadership, demanding an immediate investigation and resolution.

I have to be frank with the House: what progress has been achieved is due to the significant additional capability provided by the Cabinet Office pensions recovery taskforce, and a team of more than 140 officials whom I have “surged” into the process. Let me also say that public money will not fund Capita’s failings. We will recover every single penny of these surge costs directly from Capita, and I will not remove a single member of the team until the service is permanently fixed and fully restored.

Across core areas of pension payments, quotations and complaints, the operational reality remains deeply concerning, and although the speed of quote issuance has accelerated over the past month, it still leaves more than 6,700 outstanding quotes to be processed, as of the end of June, for past retirement dates.

Let me turn to the subject of parliamentary correspondence. The volume of MP complaints remains too high—there are more than 1,900 outstanding constituent cases. I understand that Capita resolved nearly 700 last week, but another 500 or so complaints were raised, so this remains all too current an issue. When I last reported to the House, the figure stood at 1,500. The growth of the backlog is completely unacceptable. Capita has clearly failed to manage the correspondence effectively, to the extent that I have had to ask the pensions recovery taskforce to step in. Indeed, the situation has been so faltering that the Parliamentary Secretary at the Cabinet Office, my hon. Friend the Member for Southampton Test (Satvir Kaur), has written to Mr Speaker about it.

Because of Capita’s persistent failures, alongside a wider, completely unacceptable failure in its overall MP engagement, demonstrated—as was reported to me by Members from across the House—by a poorly co-ordinated MP drop-in session at the end of May, I had to intervene again. I ordered the pensions recovery taskforce to take direct operational control and establish virtual surgeries for MPs and caseworkers running every weekday. I hope that has provided at least a direct route for parliamentary offices to try to secure updates. Since I launched that initiative in May, we have delivered more than 250 virtual surgeries, supporting more than 150 Members from across the House.

Let me now turn to the steps that I am taking to protect scheme members. I have no doubt that all Members will agree with me that the service that Capita has provided has been dreadful. We need to take further robust measures. First, I will continue to apply the most stringent commercial levers. We are executing robust, continuous action with immediate financial consequences. We have already hit Capita’s bottom line by withholding £9.9 million in payments, because the Government will only ever pay for what is successfully delivered.

I find this failure remarkable in the light of the personal assurances given to me by the chief executive ahead of the transfer. Those assurances have not been met. Core outputs are deficient, and Capita is failing even to make basic functionality work. I know that many Members are calling for the immediate termination of the contract and the insourcing of the service, but if I were to terminate the contract straightaway, that would clearly cause severe disruption to the payroll. I have to manage this so that the payroll is operated effectively; what I cannot do is create an immediate, catastrophic operational vacuum. I cannot replace a complex pension operation overnight. However, I have instructed my officials to bring together a broad range of stakeholders and experts to consider, in line with the Government’s strategy, how scheme members can best be served by a long-term, durable delivery of the scheme. Let no one think that I or the Government are accepting the status quo.

This episode highlights the severe limitations of outsourcing the civil service pension scheme. I say openly to the House that if I could insource this operation today, I would do so. None the less, it is Government policy to insource, in line with our manifesto commitment to deliver

“the biggest wave of insourcing of public services in a generation”,

and this pension scheme could be a prime candidate for insourcing in the future.

That future is being actively shaped by the Government’s announcement on 17 June of a new public interest test that will end outsourcing by default. From April 2027, all contracts over £1 million in value must be assessed for in-house viability before renewal, and Departments exceeding £100 million in annual spend must develop five-year insourcing strategies. This framework builds the exact long-term capability that we need, shifting our focus from short-term pricing to service quality and operational resilience. To ensure full accountability, we are executing our contractual right to deploy independent auditors immediately to conduct a technical review of systems, data integrity and compliance with statutory duties. We are also beginning the process to appoint a remedial adviser, at Capita’s expense, to force rectification directly on the ground.

I am not ruling out further interventions, but we need to build the unvarnished evidence base that will serve as a strict prerequisite for further formal escalation, including potential litigation or step-in remedies, should performance fail to improve. In October, the House will receive a further update on the findings of the independent audit, the performance of the remedial adviser and the longer-term structural options being considered, including meeting our manifesto commitment by bringing the scheme in-house.

Let me finish by saying this. Public servants who dedicated their working lives to this country deserve absolute financial security and unwavering dignity in retirement, not corporate failure, empty promises and severe administrative failure. I hope the House will see the uncompromising line in the sand that I am drawing today. I will continue to apply commercial pressure and ensure full accountability, and we will find a way forward that delivers for the people who deliver for this country. I commend this statement to the House.

I call the shadow Minister.

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.

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.

The Public Accounts Committee and Sir Geoffrey Clifton-Brown, its Chair—

Order. We refer to colleagues not by their names, but by their constituencies. You have already named the Chair of that Committee, so dive into the question.

I will dive very deeply into the question, Madam Deputy Speaker.

The Chair of the Committee sends his apologies for his absence; he is presently in a Committee meeting. We have looked at this situation on a number of occasions, and we will have a joint session with the Public Administration and Constitutional Affairs Committee and the Minister on Wednesday. The individual cases that we have heard are absolutely appalling, and we will relate them to Capita and the Minister. We have heard from two widows who have been waiting since last year to get their pensions sorted out, which is not acceptable.

I have two issues for the Minister to reflect upon. When the previous Government let the contract, we were in a situation in which procurement could not properly take account of the past record of companies, and I understand that the Government have now changed that. Looking at Capita’s past record on both the teachers’ pension scheme and the civil service pension scheme, we see that it has not run one scheme properly. That should have been taken into account before the contract was let. 

The other issue, and this is where the Opposition spokesperson did say something relevant, is that this scheme was falling apart last year. The National Audit Office looked at it, and clearly it was going wrong then. So I ask the Minister: did he start to look at alternatives then and did he at that point start to put together in-house provision that could eventually take over?

My hon. Friend is absolutely right that these cases are harrowing. He is also right to say that there were huge issues—I am sure we will cover this on Wednesday—with MyCSP, the previous provider. As I have said, the previous Government decided to sign this contract in November 2023. That is not, of course, to say that I was just seeking specific reassurances last autumn; we were also looking at contingencies. I am sure that he, and indeed the hon. Member for North Dorset (Simon Hoare), will cover that in the two Committees’ joint evidence session on Wednesday.

I call the Liberal Democrat spokesperson.

I am grateful to the Minister for advance sight of his statement. The failure of Capita to meet the 30 June deadline is deeply disappointing, but, sadly, not surprising. Behind it sit 1.7 million current and former civil servants who simply want peace of mind that the pension they have earned through decades of public service will be handled competently, fairly and with dignity. Capita’s repeated failures are causing distress and uncertainty for people who deserve better, including several of my constituents, such as Sue from Romiley, Tracy from Offerton and Christopher from Marple.

The Public Accounts Committee did indeed warn that Capita risked not being ready to take over full administration back in December, and it raised serious concerns about weak contract management and poor oversight. Those warnings have now come to fruition as thousands of retired civil servants have experienced delays or complete failures in pension payments since Capita took over. How will the Government restore confidence for the 1 million-plus current and former civil servants who simply want reassurance that their pensions will be administered competently? What assessment has been made of the systemic failures in the administration of this scheme, and what lessons have been learned for future contracts of this kind? How can the Minister ensure that this failure is given sufficient weight should Capita have the brass neck to bid for any future Government contracts in this are or wholly unrelated ones?

The Minister has rightly called the thousands of unresolved bereavement cases harrowing. These grieving families are being denied closure. Will he commit today to ordering Capita to prioritise all bereavement cases as a matter of particular urgency, and will he guarantee that this specific backlog will be zero by a certain date?

To take the hon. Lady’s final point first, yes, bereavement cases are being prioritised. Capita’s current working assumption is that the remaining backlog of over 6,700 quotations for past retirement dates and the 4,100 actionable bereavement cases will be systemically cleared through the rest of July and August, and I hope this House will hold it to that timetable.

More broadly, the hon. Lady is absolutely right about learning the lessons from this situation and robustly holding Capita to account. That is why, as the House will be aware, I took the decision to end, for example, its contract for the Royal Mail pension scheme. The House can be assured that I will not hesitate to take robust action.

On the hon. Lady’s other point, which I think is a central one, I am always very conscious—contrary to what the shadow Minister says—of the operational position week to week in order to ensure that I am still driving the improvement of this pension scheme to the level it should be at.

This is a real mess, and I am pleased the Minister has acknowledged that, but there are a few practical things that could be delivered. There is no MP hotline, and there is a long and complicated process for MPs and their staff to go through the other hotline. Could that perhaps be resolved, because it would make things a lot quicker? When emails are sent, the same AI-generated generic responses are sent back repeatedly, which means that no progress is made. The to-ing and fro-ing is just wasting time. There could be clearer guidance about what MPs can pass on to our constituents who have challenges. Finally, postal delays are a real issue in my constituency and others, particularly in London—I see that Members from around the country are nodding—so could there be more use of email to, at the very least, get out the statement, even if there is eventually paperwork to be signed? Most organisations now manage to do paperwork via email, so could Capita not sort that out?

I am more than happy to take on board what my hon. Friend has said about streamlining MPs’ interaction with the service. The Parliamentary Secretary has passed on many of these points directly to Capita, and indeed has raised its behaviour directly with the Speaker’s Office. More broadly, I am more than willing to look at what my hon. Friend has said.

I thank the Minister for his statement and, through him, his officials, and particularly the surge team, who are trying to clear up this mess of Capita’s creation.

I am sure the Minister will share my bemusement at Capita’s stance. It seems to have no emotional intelligence whatsoever in relation to understanding the very demonstrable harm that is being done to constituents the length and breadth of this country. It does seem cognisant that His Majesty’s Government happen to be customer No. 1 as far as Capita’s balance sheet is concerned. Is it unwilling or unable to face into the situation as it currently presents itself, and really put its shoulder to the wheel and sort this out, or does he fear it has just given this up as a bad job, is just waiting for the contract to be taken from it and will just soft-pedal between now and when that time comes?

As ever, the Chair of the Public Administration and Constitutional Affairs Committee makes very sensible points. I make it very clear from this Dispatch Box that Capita certainly should not in any sense be soft-pedalling. It has specific contractual duties to which I have been holding it and to which I will continue to hold it. Aside from the commercial and money aspect of this, hugely important though that obviously is for public money, he is right to highlight the emotional impact. These people—the Liberal Democrat spokesperson talked about bereavement—are in a very vulnerable position in their lives and are seeking to access the money that they themselves paid in.

Order. To help more Members get in, questions need to be short and limited to just one question.

Like other Members across the House, I have constituents who have faced unacceptably long delays, including a terminally ill lady who has been left waiting for months; a man in severe financial hardship who was due his first payment in December 2025, but, shockingly, is being forced to wait until 2027; and a lady, whose brother died in service in 2024, who is unable to settle his estate due to the delay.

The Minister has talked about the missed deadlines, yet in February Capita was awarded more contracts across four Departments. Frankly, it is shocking that the Government are unable to pay the pensions of their own civil servants, who have spent their lives serving the public. When will the Government finally take the civil service pension scheme back in-house rather than rewarding failure? Will he assure the House that no further Government contracts will be awarded to Capita?

First, in line with the Government’s policy of looking across contracts of high value, as I set out in my statement, I think this contract is a prime candidate for outsourcing. Indeed, this Government have introduced the public interest test, which I hope will most certainly give a different dimension to procurement and a different approach to insourcing, in line with the manifesto commitment on which my hon. Friend and I campaigned.

One of my constituents, Caroline from Rickmansworth, has been waiting over six months to receive the documentation required to retire. Capita publicly stated that all outstanding retirement quotes would be issued by the end of June 2026. However, this deadline has passed and Caroline is still waiting. What advice can the Minister offer Caroline about what she should do to receive this essential documentation?

I am very sorry to hear about Caroline’s case. If the hon. Member is willing to write to me directly with the details, the Parliamentary Secretary will gladly look into that case.

The family of a terminally ill constituent contacted me in desperation last month after trying to resolve the pension issues of their family member since January. She died yesterday, with her pension still unresolved. Can the Minister be more specific for that family about what will be done to resolve this issue? It is too late for my constituent, but her family have been through enough.

I am very sorry to hear about my hon. Friend’s constituent; it is a tragedy that she passed away only yesterday. I would be glad if she wrote to me about that particular case. The Parliamentary Secretary will look into it personally, because of the nature of what has happened. For that family, and for every other family with an interest in this scheme, we absolutely must restore the level of service that they rightly expect.

Sadly, it is not just Capita that is missing deadlines; it is the Government, too. I raised a constituent’s case in ministerial correspondence in mid-February and received a response from the Parliamentary Secretary only on 30 June, four-and-a-half months later. My constituents want a swift solution. Given that the April deadline has been missed and the June deadline has been missed, what confidence can they or this House have that the August deadline will be hit?

On the right hon. Gentleman’s first point, we will look specifically at why that was the case. It should not have taken four-and-a-half months for him to receive a reply. The Parliamentary Secretary and I will look at the correspondence to see why that has happened. Secondly, on his point about confidence in the new July and August deadlines, what is critical—this is specifically why I am now looking at a range of options—is that we must be in a position where the service is being delivered properly.

I thank the Minister for his statement. New cases are still coming into my office, with tales of failure to get through on the telephone or a lack of online access. They remain common, but most common is the financial distress. My case team keep hearing about people who are about to lose their house. The interim interest-free loans made available in January were welcome, but for those who are still awaiting settlements, will the Government consider further payments?

Yes. First of all, the interest-free loans introduced earlier in the year are important, but I know they are not suitable or the choice for every beneficiary under the scheme. Secondly, as I indicated in my answer to the shadow Minister a moment ago, compensation is also very important. I reiterate to the House that I have surged significant resources into this scheme, but I am absolutely determined that it will not be the taxpayer who picks up the bill.

I welcome the statement, and whenever we have come to the Government, they have reacted quickly. Capita appeared to be moving quickly, but this week a woman I have been representing since March, and who has been pursuing Capita for more than a year over her husband’s death in service benefits, told me this week that—this is a doozy—it is refusing to accept a Scottish extract of divorce and is demanding that she get an decree absolute, according to the English and Welsh courts. She is prepared to do that, but it would take so long that it will take her past the deadline after which her children will have to pay tax on the death in service benefits. Can the Government give her some reassurance that she will not be pursued for tax, and that something will be done to tell Capita that a Scottish extract of divorce is actually valid?

Well, quite. I am grateful to the hon. Lady, who I believe has had a few virtual surgeries. She has been in contact with my office and has a number of ongoing cases—I counted seven before I came in to deliver the statement. I think she has met the Parliamentary Secretary previously, but the Parliamentary Secretary would be more than willing to meet her again on this issue and to highlight to Capita the particular issue around Scottish divorce law.

I have heard from dozens of my constituents across the City of Durham who have been impacted by either delayed or missing pension payments, and the number grows every day. A recent disturbing case centres around a chap who, sadly, has been diagnosed with early-onset Alzheimer’s at just 46 years old. Ill health retirees should never be left without the vital support they need at the most difficult moment of their lives. Will the Minister please reassure the House that Capita will clear the existing backlog as a matter of urgency, prioritising those with ill health, bereaved families and those facing financial hardship?

Yes, it should absolutely be prioritising bereavement cases and people in the position my hon. Friend’s constituent finds himself in at the age of just 46. As I have said, Capita has set out the working assumption of clearing the backlog in July and August. She can rest assured that it will be held robustly to that.

I currently have 11 unresolved cases in my constituency and the numbers are going up. My constituents deserve certainty about these unacceptable delays. During Cabinet Office questions on 25 June, I raised these failures with the Parliamentary Secretary, Cabinet Office, the hon. Member for Southampton Test (Satvir Kaur), who assured the House that “all…levers” were being used to ensure that Capita met its end of June deadline. Can the Minister tell us what those levers were, given the fact that they appear to be attached to nothing—Capita has still failed to meet that deadline—and what levers he will pull when the August deadline is, inevitably, not met either?

The hon. Gentleman will be aware from my statement that £9.9 million has been withheld from Capita. I will continue, where milestones are—[Interruption.] He makes a valid point; that is precisely why I am now looking at a range of options, while continuing to prioritise operational performance in the short term. He is right that this is where we have been driven to under this contract—to look at this range of options. We have had deadlines that, I am afraid, have repeatedly not been met.

I am sure it will come as no surprise to anyone in this House that the deadline was missed today, on top of the previous deadlines. I do not think that anyone has faith in the ability of Capita to deliver. In my constituency and across Blackpool, the Fylde coast and in the neighbouring constituency of Blackpool North and Fleetwood, we see such cases come to our surgeries week after week. Will the Minister outline when, and how quickly, the Government can bring this provision back in-house to ensure we have a transition? Enough is enough. Too many of our constituents—in my constituency and across the country—are suffering and this issue needs to be resolved.

Looking forward, the Government have already announced their new public interest test to end outsourcing by default. From April next year, all contracts over £1 million have to be assessed for in-house viability before renewal. Departments exceeding £100 million in annual spend must also develop five-year insourcing strategies. We are moving swiftly to deliver our manifesto commitment.

My constituents Scott and Pamela McBride from Peterhead are victims of this shambolic bùrach. They retired in April 2020 and are still waiting on a resolution. They came to me in February. I will keep it simple: if I write to the Minister with the details, can his surge team help me with a surgery appointment to sort this out?

The simple answer is yes, and I am sorry to hear about what has happened with Scott and Pamela.

I recently met a woman who had spent her career fighting fraud for the Department for Work and Pensions. If she had behaved in the way that this company is behaving around her pension, she would have been fired on the spot. It is one rule for ordinary working people and another for these outsourced companies, which behave so terribly on the taxpayers’ money. In Darlington, we have a Capita base with over 1,000 employees. Capita recently announced that it could no longer afford to pay the real living wage. How much profit is it making on this £200 million contract that it is failing to deliver?

I have not hesitated to use commercial levers to withhold millions of pounds from Capita when it has not delivered the performance it should have. My hon. Friend puts her finger on a very important point: it is for Capita to have a sense of self-awareness about its own conduct and the consequence for a lot of very vulnerable people.

Like all of us, several constituents have raised heartbreaking issues with me—they are getting into real financial duress. My constituents viewing our proceedings today will be thinking, “Well, what’s going to change?” Will the Minister consider compensating people from Capita’s profits, so that all missed payments are given to people who are in financial difficulty? Everybody should get what they should have got on the date they should have got it, straight out of Capita’s profits.

On the principle of compensation, the right hon. Gentleman has a valid point. I set out some of the arrangements that are already in place, particularly in relation to interest where money should have been paid that was not paid on time. There is a second principle here, which is that the taxpayers of the United Kingdom will not pay for Capita’s failure.

I declare a non-pecuniary interest as the chair of the Public and Commercial Services Union parliamentary group. I take it as read that, when the Minister refers to the stakeholder group, it will include PCS, as the trade union. I also take it as read from the tenor of the questions so far that insourcing will be top of the agenda for that review. I ask him, in all rationality: how is it that Capita has been awarded a £320 million contract to administer the pay of 250,000 civil servants?

To my right hon. Friend’s first point: yes, of course, the stakeholder group includes PCS. His question on Capita being awarded the contract in the first place is a valid one. It is fair to say that the previous pension provider was certainly not providing a sufficient level of performance, but, as he will have heard in my answer to the shadow Minister, the hon. Member for Kingswinford and South Staffordshire (Mike Wood), the contract was signed in November 2023; we inherited a long-term contract and I have been trying to deal with the issue since.

One of my hard-working caseworkers attended one of the virtual surgeries that have been mentioned, but every single update they received was wrong. Lump sums, quotes, paperwork and complaint responses were all said to have been sent out, yet not one case had actually moved. My constituents feel lied to and my staff feel disrespected. Will the Minister tell the House what further action will be taken to hold Capita to account for those false assurances?

Quite simply, that should not be happening. If the hon. Lady is willing to write to me with precisely the information that was given, and what the correct information was, the Parliamentary Secretary will look into it.

I thank the Minister for coming to the House to give this important update. To be honest, I think that many of our constituents will be watching with a lot of alarm, concern, anger and frustration, thinking, “How will this situation change?” A constituent of mine wanted me to raise his case. He said:

“I turn to you as a last resort for help in a moment of personal crisis and right to family life. For the past six months I have been trying to get the civil service pension scheme to issue me with a letter confirming my annual and monthly pension entitlement…I am a 70-year-old retiree with medical conditions. I reside 50% of year in Brazil…with the remainder of the time spent in the UK where I am a UK taxpayer. I am a retired member of the FCDO having served almost 38 years in various diplomatic roles.”

This is not a way to treat hard-working members of staff who have given so much of their time to our Government. Can the Minister assure me that Capita will be held accountable for the failure, and will he say that heads should roll?

My hon. Friend is absolutely right that the situation has been totally and utterly unacceptable. Capita has been and will be robustly held to account. That is why I have appointed an audit to look at the future of the scheme, as well as the remedial adviser—who is being appointed at Capita’s expense—to force rectification directly on the ground. There are two things too look at here: the immediate operational issues, and the future of the scheme.

I am grateful for the hon. Gentleman’s constructive tone. The Government have introduced the new public interest test to end outsourcing by default, which will mean that the reassessment will happen from the start of next year. It is important, as the hon. Gentleman fairly concedes, that we need to look back over a few years across different Governments.

Order. The questions are far too long. Too many colleagues will be disappointed unless questions are kept short. I call Kim Johnson to show us how it is done.

I really welcome the Minister’s statement, and his acknowledgment that Capita has failed—and failed miserably, not for the first time—1.7 million civil servants, including some in my constituency. I would like to ask him: what due diligence was undertaken, and how much profit is Capita making when it is not paying the living wage? Should you now consider sanctioning the company more than the £9.9 million, and will you please work with unions to—

Order. Gosh—a long question and the hon. Member is saying “you”; it is not my responsibility. Minister, over to you.

Yes, we will continue to work with trade unions and other stakeholders. Yes, it is correct that £9.9 million in milestone payments has been withheld, but my hon. Friend can rest assured that I will not hesitate to continue to use all commercial levers if there is poor performance.

I welcome the statement. I want to follow on from the question from the hon. Member for Mid Bedfordshire (Blake Stephenson). Yes, Ministers must take responsibility for the contracts, but ultimately Whitehall fails to deliver value for money on behalf of the public. It is not enough to say that the Government plan to insource more contracts—they cannot insource everything. What are the Government doing to ensure that Whitehall gets better value for money when it does procurement and project management?

I know that the hon. Gentleman has looked carefully at a number of these things. The point of the public interest test is to end outsourcing by default, but he is right that there is an additional cross-governmental issue: the management of contracts. That is something that I have certainly been thinking about looking at in the Cabinet Office, and the hon. Gentleman is correct to say that we need to look at it across the board.

Angela, from Great Barr, worked for the civil service for 42 years. She was looking forward to retirement but it became a nightmare when, despite her long and loyal service, she could not get her pension from Capita for six long months, causing her huge distress. Will the Minister commit to holding Capita to account every single day, and will he make sure that we remember this if the company ever applies for public contracts again?

I am sorry to hear about the experience of my hon. Friend’s constituent; she can be assured that we will continue absolutely to hold Capita robustly to account every day.

The Minister set out for the House the robust accountability measures that he has in place. I appreciate that it is difficult for him to ensure that he gets the response he wants from Capita, but can he please ensure that when constituents of mine, like Keith Wyvill, contact their former employer, the Cabinet Office, they are not simply given the brush-off and told to raise the issue with Capita, but at least have set out for them the actions that the Government are taking?

Yes, and I am very sorry to hear about what has happened to Keith. The hon. Member will know about the pensions recovery taskforce, but if he can specifically tell me the date and what exactly happened to Keith, I would be more than happy to look into the matter.

My constituent logged into the pension portal this morning and it told him that he had only been employed by the civil service for one year, not the 35 that he had been employed for. He was told this by an agency that did not even exist when he started working for the civil service, and that still cannot tell him what his annual pension value is. That is after a software upgrade at the weekend, by the way, so God knows what it was like before then. This shows just what a shambles the system is. I welcome what the Minister said about the public interest test, but do we not also need to make a competence test a key part of that, so that these companies that are serial offenders do not get near public contracts again?

I am very sorry to hear about what has happened to my hon. Friend’s constituent. He is right: competence and delivery are absolutely central under these third-party contracts. We need to hold to account every person who has been awarded the contracts to ensure that they are delivering for the public to the standard they are expected to.

My constituent Anita was widowed suddenly in December 2025, and Capita has failed to calculate her lump sum and pension payments. She is living in desperate hardship; she has exhausted all her credit cards and there are no friends and family left who can support her. She has not even been able to scatter her husband’s ashes. The Minister has insisted that bereavement cases are prioritised, but the evidence suggests otherwise. What is the Minister doing now to ensure that people like Anita are not living in hardship? They need urgent action.

I am very sorry to hear about the hon. Lady’s constituent. First, if her case is not being prioritised, we would want to see it individually so that we can take it up. Secondly, I am not sure whether her constituent has applied for a hardship loan, but that is the type of situation that I introduced the loan for earlier in the year. If the hon. Lady could write to the Cabinet Office with the details of the case, we could also look at eligibility, if a hardship loan was something her constituent wanted to look into.

I thank the Minister for his statement and I appreciate all the Government’s work to resolve this inherited issue. However, the system is inadequate, and it is causing serious problems for many in my constituency, which has a higher than average number of outstanding cases. Capita’s communication is terrible; my constituents are left in the dark, and vital documents and quotes are repeatedly lost—either that, or it is a deliberate delay tactic. Capita builds up expectations, sets deadlines and, time and again, fails to deliver. When does the Minister envisage that all my constituents will finally get their pensions paid?

I am grateful to all the public servants in my hon. Friend’s constituency and indeed across the country, who frankly deserve better. On past retirement quotations and past retirement dates, and on the actionable bereavement cases, as I indicated a moment ago, Capita’s working assumption is that they will be cleared during the rest of this month and next month. Collectively we must hold them to account for that.

One of my constituents submitted a request for their pension just over a year before their proposed retirement date, but is still waiting—sadly, it is little wonder that the June date has been missed. My constituents will thank the Minister for explaining the significant resource that the Government have allocated to eradicating this backlog, but, in advance of the August deadline, what additional resource in terms of staffing or funding is Capita allocating to the task?

The hon. Gentleman makes a very good point. I stand ready to continue with the surge resource; I have very frequent updates on that, and I give consideration to what additional resource might be required from me. However, he is absolutely right that we must not neglect the resource or prioritisation that Capita itself is giving to this. It is hugely important that it sticks to its word.

Paul and Susan Robinson each worked for the Health and Safety Executive for more than 40 years. They have not been able to plan for their retirement since finishing work last year; they have been living off their savings and the small loan that they have had. They are typical of the dozens of constituents who have contacted me. The Minister has talked quite rightly of his anger at the missed deadlines. How can he give us confidence that we will not be back here again in a few months’ time with another deadline having been missed?

It is precisely because of that concern that I am looking to come back to the House in very short order to look at a range of options for this matter.

I declare an interest as a former civil servant and a future civil service pensioner. Many of my constituents are angry about this situation, like Gary, who waited more than six months and has now received a pension that is wrong, or the widower who has not received anything yet. I am glad that the Minister is angry, but let me ask him this: if a senior civil servant had been responsible for this scheme, would he not have sacked them? What is he doing to ensure that the chief executive, who has told him so many lies, loses their job?

I am grateful to the hon. Gentleman for his many years of service to the public and pay tribute to him for his work before entering the House. On holding people to account, he can rest assured that I have been doing just that since last autumn and through this year, and that I am doing it financially with Capita as well.

A constituent of mine who served for 44 years in the civil service contacted me in May and said that, despite assurances given to Ministers that call wait times were down to a couple of minutes, she had waited that day for an hour and 40 minutes before giving up. Does the Paymaster General agree that civil servants who have served our country for decades are entitled to a far better standard of service than the woeful one Capita is providing?

My hon. Friend is absolutely right.

I also must declare an interest, as my husband is a civil servant and is currently paying into a pension. Does the Minister agree that this is one of the best examples we have of the social contract falling apart? People who have literally worked for the state are now unable to be paid by the state. I really welcome your statement about insourcing. You have said that it is important that the taxpayer not have to foot the bill—

Order. I have not said anything. End your question quickly.

There has been a cost to the taxpayer in people’s lives. What can you do to restore confidence in the system?

Order. What can I do to restore confidence, or what can the Minister do? You mean the Minister?

Good.

The hon. Lady is absolutely right to talk about the cost in people’s lives; considering what has happened when people are at their most vulnerable, it clearly goes beyond the monetary. We absolutely have to restore a contractual level of service as a priority and then, as I say, look at a range of options in the medium term.

Mr Evans applied for early release of his civil service pension on health grounds because of terminal illness in November 2025, but sadly passed away this May. His case is still not resolved, despite repeated urgent representations from my office. Capita has failed inexcusably. What actions can be taken to ensure that Mr Evans’s family receives the pension and payments owed without further delay, and to hold Capita to account? Will interest be paid on back payments?

On compensation, there is provision around interest. I would be very grateful if my hon. Friend could write to me about that specific case, and we will look into it.

I am pleased to hear the Government accept that part of the issue here is successive Governments’ obsession with outsourcing by default. I ask the Minister for some reassurance that, when assessing the merits of insourcing this particular contract, they will not do so in isolation, but will also take into account the wider benefits of building state capacity so that the Government are able to execute their core functions with confidence.

Yes, absolutely. That is why it is so important for the public interest test that we look at the different contracts right across Government. I agree.

I thank the Minister for this statement. Time and again, our constituents have been failed by outsourced companies; it is not just Capita, and it is not just Government services. Following on from an earlier question, what else will the Minister do to ensure that the other parts of the public sector—Government agencies, local government and so on—can learn from what he is now putting in place in future on outsourced contracts?

My hon. Friend is absolutely right. That is why the introduction of the public interest test to end outsourcing by default is so important for systemic change.

My team are dealing with 18 civil service pension scheme cases. One of them involves Frosoulla, from Glastonbury, who took partial retirement earlier this year to care for her 92-year-old mother. She has made more than 15 calls to Capita and each time been reassured that her case has been prioritised—but she still has not had any correspondence at all, and she has no pension to draw on. After years of public service, she deserves better. How does the Minister intend to restore confidence for people like Frosoulla, who simply want access to the money that they have worked hard to earn?

The only way to restore confidence is quite simply to get this service to the level it should be at—to the level that her constituent deserves.

I have been contacted about this issue by 14 constituents and have raised their cases. Only three of them have been resolved; the unresolved ones include bereavement cases, which we were told would be prioritised. I went to the drop-in for MPs, but I sat there for 40 minutes and then left because nothing had happened. It beggars belief that this company has ridden roughshod over people who have been public servants for years. Can the Minister say what will it take for us to take the contract off Capita?

My hon. Friend makes a very good point about the drop-in for MPs. Again, that is why I felt I had to intervene directly, because even that was causing a problem. On his second point, he can rest assured that wherever contractual performance falls below the level required, I will take action—and I have. As I say, in the context of our policy on insourcing, we are also looking at this contract being a prime candidate.

My constituent Jamie Dalgleish served 25 years in the submarine service, followed by 23 years in the Ministry of Defence police. He retired last year, but is still waiting for his monthly pension to start. Such is his financial hardship that at 65 years of age, Jamie has now taken a civilian job back with the MOD police, cleaning out the dogs’ kennels for minimum wage. He has been failed by Capita. Will the Minister take Jamie’s case directly to Capita and find a speedy resolution to this shocking injustice?

I am more than happy to do that for the hon. Gentleman’s constituent Jamie. That is totally unacceptable.

My constituents have been treated appallingly by Capita. Some of them have died waiting for their pension—the inevitable consequences of outsourcing contracts on the cheap. I welcome the Government’s decision to hold Capita to account at last. Will the Minister ensure that no more Government contracts will be awarded to Capita and explain why, given its dreadful performance, anyone thought it was sensible to award it the Synergy contract?

My hon. Friend has spoken powerfully on many occasions about how her constituents have been affected by this issue; I know she has many cases. The introduction last month of the public interest test, which will end outsourcing by default, will make such a difference.

I thank the Minister for his statement and the work he is doing to bring this issue to a resolution. A growing number of my constituents are affected. The response from Capita has been appalling, and correspondence is taking weeks or indeed months to get through. Just today, at one of the surgeries that the Minister has set up, Capita failed to provide my caseworker with an update on an individual case, despite us giving more than a week’s notice of the background. The response from Capita continues to be shockingly poor. Can the Minister ensure specifically that those surgeries are fit for purpose? At the moment, they are not delivering.

Yes, I am certainly happy to do that. We now have taskforce members on each one, but if Members are not getting the information that they require, I ask them please to escalate it to me.

One of my nine remaining open cases is Dr Carol Furlong, who lost her husband in 2015. She was told in October, after a long battle, that nearly £15,000 would be paid within 28 days. She still has not received a penny. Can the Minister please assure the House that Capita has sufficient resources in place to deal urgently with cases causing financial hardship, and will he confirm that claims involving bereavements will still be treated as a priority?

Yes; they should be being prioritised. I can assure my hon. Friend that I will continue with the surge resourcing until I am satisfied that the contractual standard can be met—it the moment, I am not.

My constituent Carol Campbell is a marine coastguard team leader in Stornoway. Civil servants like her do not just serve the public—they save the public. The June deadline has come and gone, and all she sees is a shambles. I know Carol; she has given a lifetime of service. She tells me, “At 63, I am loath to continue working through another Hebridean winter doing 12-hour dayshifts and nightshifts, but currently I don’t feel I have any alternative.” What steps is the Minister taking to ensure that Capita and its chief executive are held to account for failing these lifesavers?

I am grateful to Carol for her service. She can be assured that I will robustly continue to hold Capita to account. I do not know whether, in her particular circumstances, a hardship loan would have been appropriate, but if my hon. Friend writes to me with the details of Carol’s case, I will be more than happy to look into it.

Too many of my constituents are seeing delays to receiving their civil service pensions because of Capita’s failures. In some cases, it is causing serious hardship, and I am doing all I can to assist people to access their hard-earned pensions. Will the Minister outline what steps he is taking to ensure that correspondence from Members in this place, advocating for their constituents, is dealt with quickly by Capita?

My hon. Friend puts his finger on the issue. That is why the Parliamentary Secretary escalated this problem to Mr Speaker, so serious was it. My hon. Friend can be assured that we will continue to hold Capita robustly to account on that.

I thank the Minister for his statement. He may recall that in a Westminster Hall debate on 4 February many of us raised cases of affected constituents. I spoke about four Dartford residents who were unable to access their civil service pensions. Two of those cases remain completely unresolved, and one has been only recently resolved. Does the Minister agree that our civil service pensioners deserve much better than this and that, of the tough measures he has announced today—I thank him for those—taking the contract away from Capita must be firmly on the table?

Absolutely. Public servants, who are represented in the Chamber by Members across the House, deserve so much better. My hon. Friend can be assured that the independent audit will be looking at a range of options.

Several of my constituents have been failed by Capita; with the support of my team, they have been battling to get the pensions that they are owed and deserve. Frustratingly, for some the June milestone has come and gone. Just last Friday I met Barbara, whose husband passed away in January. On top of that grief and sorrow, she is still battling to get her late husband’s pension. She has been asked by Capita for the same documents over and over again. Does the Minister agree that that is completely unacceptable, and can he assure me and the rest of the House that every single option is still on the table, including bringing the contract back in-house?

My hon. Friend is right that that situation is totally unacceptable. People should not have to battle in that way at vulnerable moments in their life. He can be assured that we will look at every method to ensure that people get the level of service that they deserve.

Can I place on record my thanks to the pensions recovery taskforce that the Minister deployed? They have been working with my team in my constituency to resolve at least one of my constituents’ cases, so I am grateful for that. I am now being contacted by civil servants who are due to retire but are really worried that they will be swept up in this too. What reassurances can he give them?

It is a good question. First, we will continue to prioritise operational delivery day to day, so people who are to retire in the very near future have that reassurance. Secondly, they can be assured that we are looking in the medium term at the best, most effective way to have a proper service level.