{"id":332822,"date":"2026-03-06T23:18:13","date_gmt":"2026-03-06T23:18:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/332822\/"},"modified":"2026-03-06T23:18:13","modified_gmt":"2026-03-06T23:18:13","slug":"labour-awards-370m-contract-to-company-at-centre-of-pensions-crisis","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/332822\/","title":{"rendered":"Labour awards \u00a3370m contract to company ‘at centre of pensions crisis’"},"content":{"rendered":"

Trade unions have warned that more than 250,000 civil servants could face potential salary delays after Labour awarded outsourcing firm Capita a \u00a3370million contract to manage payroll services.<\/p>\n

The decade-long agreement, revealed on Wednesday, will see the company oversee payroll, human resources and recruitment functions for four major Whitehall departments.<\/p>\n

These include the Department for Work and Pensions (DWP), the Ministry of Justice, the Home Office and the Department for Environment, Food and Rural Affairs.<\/p>\n

While the initial contract is valued at \u00a3370million, the DWP indicated the total cost could rise once optional services and additional provisions are included.<\/p>\n

Reports suggest the final value of the agreement could approach \u00a3700million.<\/p>\n

The decision has prompted criticism from trade unions, which say the contract raises concerns given Capita\u2019s recent record delivering public sector services.<\/p>\n

The outsourcing company has faced several high-profile difficulties linked to government contracts in recent years.<\/p>\n

In January, Capita apologised after more than 8,000 retired civil servants experienced delays to their pension payments.<\/p>\n

Some affected retirees reported struggling to meet mortgage and rent obligations as a result of the delays.<\/p>\n

\"Pat<\/p>\n

Pat McFadden overseas the DWP and the contract given to Capita<\/p>\n

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GETTY<\/p>\n

Government departments subsequently issued 540 emergency loans worth \u00a32.9million to those impacted.<\/p>\n

The company was also fined \u00a314million in 2025 following a cyber attack that compromised more than six million records.<\/p>\n

The breach exposed sensitive financial information, including bank account and credit card details.<\/p>\n

Since 2023, Capita has also lost contracts with the Department for Education worth \u00a3414million.<\/p>\n

The company\u2019s 27-year role administering the Teachers\u2019 Pension Scheme ended when Tata Consultancy Services secured a replacement contract worth \u00a3234million.<\/p>\n

\"Capita\"\/<\/p>\n

Pension holders have reported having ‘no money’<\/p>\n

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Administrative issues during that period resulted in some teachers receiving pension payments that were thousands of pounds below their correct entitlements.<\/p>\n

The Public and Commercial Services union criticised the Government\u2019s decision to award Capita the new contract.<\/p>\n

Fran Heathcote, general secretary of the Public and Commercial Services union, said: “Capita is already at the centre of a pensions crisis that has left retired civil servants in distress.”<\/p>\n

She added: “Privatisation is failing, so why does the Government continue to reward those responsible with yet another massive public contract?”<\/p>\n

Ms Heathcote warned the decision could affect the pay of hundreds of thousands of civil servants.<\/p>\n

She said: “Ministers can see these crises unfolding in real time, yet they are prepared to place the pay of 250,000 serving staff at risk.”<\/p>\n

Kevin Brandstatter, a national officer at the GMB union, also criticised the decision.<\/p>\n

Mr Brandstatter said Capita\u2019s track record delivering government services was “nothing short of woeful”.<\/p>\n

He added that the publicly funded function “should never have been awarded to a private company”, referring to the 2023 cyber breach that exposed records belonging to 6.6 million people.<\/p>\n

The procurement process is also facing legal scrutiny.<\/p>\n

Sopra Steria, the rival bidder that currently provides some of the services, has launched legal action over the decision.<\/p>\n

The company claims the DWP failed to identify that Capita\u2019s successful bid was “abnormally low”.<\/p>\n

\"Pensioner\"\/<\/p>\n

Capita defended its appointment and said it had followed the correct procurement procedures<\/p>\n

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A spokesman for Capita said: “We took part in a robust procurement process and stand ready to work with the DWP to ensure a smooth transition of service.”<\/p>\n

The spokesman added that the company\u2019s “priority remains to ensure value for money for the public”.<\/p>\n

The DWP confirmed that a contract had been signed with Capita.<\/p>\n

“We have signed a contract with Capita to deliver the Business Process Service and are committed to ensuring a smooth transition.”<\/p>\n

They added that “continuity of service and value for money for the public” remain key priorities for the department.<\/p>\n","protected":false},"excerpt":{"rendered":"Trade unions have warned that more than 250,000 civil servants could face potential salary delays after Labour awarded…\n","protected":false},"author":2,"featured_media":332823,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[72,176,61,60,6189,1087,1558,174,175,1650,1192],"class_list":["post-332822","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-ie","tag-ireland","tag-labour-party","tag-money","tag-pensions","tag-personal-finance","tag-personalfinance","tag-politics","tag-uk-politics"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/332822","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=332822"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/332822\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/332823"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=332822"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=332822"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=332822"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}