may have\u00a0underestimated\u00a0the complexity <\/a>of the work involved with the\u00a0transfer. The firm had missed agreed transition milestones to take on administration of the scheme, which has 1.7 million members. A\u00a0final go-ahead was only given for the transfer from\u00a0MyCSP\u00a0in November, weeks later than had been expected.\u00a0<\/p>\nIt\u00a0subsequently\u00a0emerged\u00a0that Capita had inherited a backlog of 86,000 pieces of casework from\u00a0MyCSP. The backlog of work had increased to 120,000 cases as of last month and thousands of civil servants have been left without expected payments.\u00a0<\/p>\n
According to the Cabinet Office, it is expected to take until June for the pension scheme returns to normal service levels, with Little saying in today’s PACAC session that\u00a0“there is a high-level of confidence that we are on track to achieve the recovery plan by the end of June”.<\/p>\n
At the session,\u00a0Little\u00a0was asked directly why the government had made the decision to\u00a0proceed\u00a0with the 1 December transfer in the face of concerns about Capita.\u00a0<\/p>\n
\u201cWe pushed the decision as far back as we could to give time for Capita to meet the milestones and the detailed go\/no-go considerations that we had in place,\u201d she said. \u201cAt that\u00a0point\u00a0the\u00a0MyCSP\u00a0backlog had significantly\u00a0increased\u00a0and we were up to the\u00a086,000\u00a0level. And also at that point Capita had given significant assurances about the level of technological investment, about the transition plan, which had gone through our due\u00a0dilligence\u00a0processes, and we had discussed the level of risks about how that backlog would be managed and what contingency\u00a0arrangements\u00a0would be needed directly with the chief executive of Capita.\u201d\u00a0<\/p>\n
\u2018Very difficult decision\u2019\u00a0<\/p>\n
Little said that by November,\u00a0MyCSP\u2019s\u00a0contract could not have been extended further\u00a0and so sticking with the provider would have involved doing so without a commercial contract.\u00a0\u00a0<\/p>\n
She said the \u201cvery difficult decision\u201d put to ministers had been whether they wanted to continue with\u00a0MyCSP\u00a0without commercial protections, but with an increasing backlog of work, or move to Capita, \u201cwith more investment, more resource and a much tougher contract\u201d.\u00a0<\/p>\n
The Cabinet Office perm sec said the department\u2019s view was that\u00a0proceeding\u00a0with the change of administration to Capita was a way to get the backlog down and manage the Civil Service Pension Scheme in a \u201cmore effective way\u201d.\u00a0<\/p>\n
\u201cI\u00a0don\u2019t\u00a0in any way like giving that sort of advice to a minister,\u201d Little told MPs. \u201cIn those sorts of situations\u00a0I\u2019m\u00a0saying, basically, do\u00a0you want to continue with a poor service that looks like\u00a0it\u2019s\u00a0going to get worse with no commercial protection. Or do you want to move to a new service that is highly risky and complicated and has some different challenges.\u201d\u00a0<\/p>\n
PACAC chair Simon Hoare suggested the choice was akin to \u201cdeath by hanging or electrocution\u201d.\u00a0<\/p>\n
Little said Hoare would have to ask the minister \u2013 Nick Thomas-Symonds \u2013 how he had felt. But she said\u00a0such judgment calls were common in big service transitions.\u00a0\u00a0<\/p>\n
\u201cI saw it as our job to look at\u00a0all of\u00a0the risks and put in place the mitigations that we felt we could put in place, which included preparations for serious service challenges,\u201d she said. \u201cWhich, sadly, is where we ended up.\u201d\u00a0<\/p>\n
Little said the Cabinet Office had conducted a \u201chuge amount\u201d of due diligence on the Civil Service Pension Scheme contract before making the final decision to\u00a0proceed, including meetings between the Cabinet Office minister and Capita\u2019s chief executive.\u00a0\u00a0<\/p>\n
\u201cWe did seek specific assurances on the backlog and on the contingency plans,\u201d she said. \u201cSadly,\u00a0these assurances on contingency were needed.\u201d\u00a0<\/p>\n
In late January, the Cabinet Office and Capita announced the creation of a surge team to help deal with ongoing service-level issues in the pension scheme following the transfer of administration to Capita.\u00a0\u00a0<\/p>\n
Around 150 civil servants have been drafted in as part of a taskforce being led by HM Revenue and Customs second permanent secretary Angela MacDonald. Part of the contingency response has involved the creation of hardship loan schemes for pension-scheme members left\u00a0in particular difficulty\u00a0by the non-payment of their\u00a0pensions or lump sums.\u00a0\u00a0<\/p>\n
Hardship loans update<\/p>\n
All civil service employers are supposed to offer hardship loans to former staff in need who have retired in the last 12 months. Last week it\u00a0emerged\u00a0that 116 out of 223 in-scope civil service employers had <\/a>at that point\u00a0confirmed\u00a0they have put schemes to\u00a0pay out hardship loans in place.<\/p>\nToday, Little said her understanding is that the organisations that have not set up schemes have not seen any retirements over the past 12 months and so have no-one eligible for a hardship loan.\u00a0<\/p>\n
\u201cA lot of our arm\u2019s-length bodies are very, very\u00a0small employers,\u201d she explained.\u00a0<\/p>\n
MPs were told that, so far, civil service employers have made\u00a0547 loans, worth a combined\u00a0\u00a32.9m.\u00a0<\/p>\n
Portal problems<\/p>\n
Elsewhere in the session, taskforce lead MacDonald told MPs that around 122,000 Civil Service Pension Scheme members are still shut out of the new portal for the scheme that launched in December.\u00a0\u00a0<\/p>\n
She said the issue affected those who\u00a0may\u00a0have had \u201cmore than one stint\u00a0of service\u00a0in the civil service\u201d.\u00a0<\/p>\n
She said the problem was \u201ca data issue\u201d that the taskforce is working on.\u00a0\u00a0<\/p>\n
MacDonald told MPs that Capita has a target of delivering full functionality for the new portal by the end of March and that she is confident that will be achieved.<\/p>\n
She also told MPs that a review of the service issues related to the transfer of\u00a0CSPS adminstration is expected to launch in early summer.<\/p>\n
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