Capita is about to sail past deadline to fix civil service pensions scheme

A union representing UK civil servants claims Capita is set to miss the terms of its £239 million contract to run a government pension scheme following a disastrous launch late last year. The tech outsourcing company's leadership had promised that using Microsoft's AI would improve the service, but the investment has yet to help …

[IGotOut]

Oh it can easily be fixed.

A simple million Pound a day fine and it'll be fixed in no time.

[David Austin]

Re: Oh it can easily be fixed.

It would be more fun to make Captia pay the (Non refundable) Interim hardship payments for civil servants who are unable to claim their pensions - The quicker they properly fix it, the less they're out of pocket, because apparently, some people can't do their job without good motivation.

[elsergiovolador]

Re: Oh it can easily be fixed.

Is it Crapita's fault they've been chosen? Do you blame a Tiger for being a Tiger?

You would think that Civil Service should know better.

[WSWS]

Re: Oh it can easily be fixed.

They're not allowed to know better. The rules say that they are not allowed to take past performance on other contracts into account in the selections process. It's insane, isn't it? The bureaucratic managerial state in action. In a conflict between the rules and common sense, they go with the rules every single time.

[elsergiovolador]

Re: Oh it can easily be fixed.

This contract was awarded in November 2023, with the award notice published that December, so it ran under the Public Contracts Regulations 2015. Regulation 57(8)(g) let an authority exclude a bidder that had shown significant or persistent deficiencies in performing a substantive requirement of a prior public contract, where that led to early termination, damages or comparable sanctions. Discretionary, fenced with conditions, and admittedly underused because authorities feared the legal burden and a challenge from the loser. But the door was open. The Cabinet Office chose not to walk through it.

Past performance was never the only lever either. Under PCR 2015 an authority could set conditions of participation, weight quality, deliverability and operational capacity against price rather than letting the cheapest compliant bid win, and demand hard evidence of capacity to absorb the actual caseload. The Cabinet Office has confirmed to Parliament that the award followed a rigorous evaluation on quality, cost and social value, and Capita won because it scored highest against the matrix the authority itself designed. El Reg's own reporting that Crapita aced the performance checks points the same way. The checks were the problem, not some statutory gag order.

For completeness, the rules have since tightened further. The Procurement Act 2023 went live on 24 February 2025 and widened the past-performance ground considerably, with poor delivery no longer needing to have triggered early termination, plus a Contract Performance Register and a debarment list so one department's experience reads across to another. None of that applies here, since the Act isn't retrospective and this procurement predates it. But it rather undermines the idea that taking past performance into account is some alien notion the system forbids. The direction of travel is the opposite.

So the constraint being invoked didn't exist. What existed was discretion, and a set of choices. Calling it "the bureaucratic managerial state going with the rules over common sense" gets it backwards. The rules permitted common sense. Someone declined to use it, and "we weren't allowed to" is a more comfortable story than "we cocked up."

[I could be a dog really]

Re: Oh it can easily be fixed.

The rules permitted common sense. Someone declined to use it

But as you stated yourself, applying the rules and disbarring someone is a huge risk as any of the big players will automatically cry foul and the burden of proving a negative (that they weren't treated unfairly) is significant. Even if the CS wins that one, the legal processes will delay a project since it would be difficult to continue implementation if there's a risk that the courts might find the procurement process faulty and force you to start all over again with the vendor you'd excluded.

When you consider that, the SRO for any project is going to want really good evidence to support excluding a potential vendor. That's a lot of extra work at a time when things are quite busy.

The other thing to consider is that while Crapita may have a track record fo non-delivery & poor performance, that alone isn't sufficient. Look at the CSPS debacle - Crapita claim (possibly correctly, I can't comment as I don't know any details other than what's out in public) that what they were given to do wasn't what they contracted to do - specifically that they were handed something in the order of 3 times the caseload they'd been told about when tendering. So not only would you have to document reliably that they failed to perform, but also that they had no extenuating circumstances (such as being asked to handle 3 times the caseload they'd been contracted to do) and hence didn't have a reasonable excuse. When you consider that, it's a very difficult challenge.

And like all the usual suspects, Crapita will be well skilled at tendering against incomplete or poorly specified contracts, only to use that as wiggle room for extra payments (sorry, the contract doesn't require that function, it'll be £xm extra to add it) or failing to perform (sorry, we only contracted for 1/3 of the workload you've given us, not our fault we couldn't cope).

[elsergiovolador]

Re: Oh it can easily be fixed.

There's a neat trick buried in all this. Government writes the procurement rules, with the Civil Service drafting at its elbow, and then both throw up their hands at how hard those rules are to use. They designed the maze and now plead they can't find the exit. A decent argument for doing this in house, which is where the PAC and the unions have landed, but notice what the difficulty argument actually concedes: the Civil Service has decided a fight with a large supplier is a price worth not paying, even when the alternative is a worse deal for taxpayers and 1.5 million members. That's a choice about who the system protects, and it isn't the public.

The difficulty is overstated. Exclusion under reg 57(8)(g) was always the nuclear option, litigable and with no known case of it actually being used. But it was never the only tool. You can score deliverability and operational capacity hard at evaluation and price the delivery risk into the quality weighting, none of which requires proving a negative in court. If a bidder with a known record of non-delivery still tops your matrix, the matrix was built to reward the wrong things. That's a design choice the authority owns, not a rules problem.

For the threefold caseload, that cuts the other way. If the handover was three times what was tendered, that's a scoping and due-diligence failure on the authority's side. The supplier's "you gave us more than we contracted for" and the authority's "we couldn't have excluded them" are the same failure in two hats: nobody specified the work, and both sides now use the gap as cover. Exactly the wiggle room you describe, baked in at tender stage.

But of course it is better to babysit the gold-plated pension than defend the taxpayer and ensure value for money.

[Anonymous Coward]

Re: Oh it can easily be fixed.

I've upvoted you because bluntly, I absolutely agree with almost everything you've written. Where I take offence is :

But of course it is better to babysit the gold-plated pension than defend the taxpayer and ensure value for money.

There are two failing in that one sentence.

It assumes that the CS pension is gold plated - it might have been once*, but it certainly isn't now. OK, it's not bad*, but it's nothing like the stories certain groups like to portray - I certainly stand no chance of being able to afford to retire early.

But more insultingly it assumes that civil servants routinely put themselves above their duty to the country. OK, in any large organisation there are going to be a few bad apples, but I've seen no evidence of that sort of thing, and if I did i would call it out. Yes, I will consider what is best for me when thinking about where I want my career to go, and so on. But when I'm doing what I'm paid to do - I'm doing it as an engineer and my goal is the best outcome I can get for whatever constraints are imposed. I could earn considerably more if I switched to the private sector (gamekeeper turned poacher), and even get a similarly generous pension (DC vs DB, but similarly generous in outcome.) I don't because I believe in what I'm doing.

* Classic was "rather good", and for someone who's now nearing retirement age and has been a CS all their life, the terms possibly justify some of the criticism. But that was closed to new entrants about 2 decades ago, and to existing members over a decade ago. It's replacement, Alpha, is nowhere near as generous.

[Anonymous Coward]

Re: Oh it can easily be fixed.

The Procurement Act 2023 established a centralized debarment regime and a public-facing debarment list for suppliers of public contracts. Managed by a Minister of the Crown and investigated by the Debarment Review Service (DRS), the list prevents "risky" or non-compliant suppliers from bidding on covered public procurements

How the Debarment List Works

Centralized Management: Unlike previous systems that relied entirely on individual contracting authorities, a Minister makes the central decision to add suppliers to the list following an investigation by the DRS.

Mandatory Exclusions: If a supplier triggers a mandatory exclusion ground (e.g., involvement in cartel activity or serious corporate offenses), they must be automatically excluded from public contracts.

Discretionary Exclusions: If a supplier triggers a discretionary ground (e.g., poor performance or competition infringements), authorities are directed to use their discretion on whether to exclude them.Duration: Suppliers placed on the list remain there for a specified period, effectively barring them from tendering for up to 5 years

Key Supplier Grounds for Debarment

Suppliers can only be considered for central debarment if a mandatory or discretionary exclusion ground from Schedules 6 and 7 of the Act applies, and the circumstances leading to it are continuing or likely to recur.

Specific triggers include:Participation in cartel activity.National security threats.Severe corporate non-compliance or failure to meet Key Performance Indicators (KPIs).

Actionable ResourcesRead the official Guidance on Debarment for a complete breakdown of the Act's rules.View the current register via the Debarment Review Service (DRS) to check if a specific company is listed or to submit a referral for investigation.If you are a contractor or contracting authority, tell me:Are you checking a specific supplier, or do you need to report a breach?Are you looking for guidance on mandatory or discretionary exclusion grounds?

[jdiebdhidbsusbvwbsidnsoskebid]

Re: Oh it can easily be fixed.

"The rules say that they are not allowed to take past performance on other contracts into account"

Not true. I've worked on Civil Service contract assessments and there is nothing of the sort. You certainly don't have to take past performance into account but you can if you want to. There's nothing to say you can't.

I think this misconception arises because some tender invitations say they will be assessed solely on the basis of the bid contents. But that's to ensure that bidders include all relevant information so that the bid is self contained, to prevent a bidder just including lots of links that never end. In those cases, you still can consider past performance. I've even seen that category explicitly stated as a bid assessment score.

[Aladdin Sane]

Re: Oh it can easily be fixed.

Only if it's taken from the exec's pension funds.

[VoiceOfTruth]

Re: Oh it can easily be fixed.

Good heavens. You don't mean hold a company to account, do you? Think about the shareholders.

[UCAP]

Re: Oh it can easily be fixed.

I'm thinking about them ... no, can't think of any good reason not to hurt them in thier bank accounts.

[Spazturtle]

Re: Oh it can easily be fixed.

Captia hasn't paid dividends since 2018 due to financial difficulties, so fines won't hurt the shareholders.

[The man with a spanner]

Re: Oh it can easily be fixed.

"....so fines won't hurt the shareholders."

They will if the company goes tits up.

Some companiies need to die, painful though that can be for the staff and customers. Its part of nature's cleansing process.

[TVU]

Re: Oh it can easily be fixed.

I checked out my thesaurus and it turns out that the synonym for Capita is Clusterfuck. Personally, and given their known history, I don't think that they should ever have been on the shortlist for handling civil service pensions.

[Paul Herber]

The thing I love best about deadlines is that whooshing sound as they go past.

[TimMaher]

Whooshing deadline

Haven’t heard that in years.

Brilliant!

[ecofeco]

And the slight, cooling breeze that brings the wafting aroma of desperation.

[EdSaxby]

Spoken like a true consultant (with their nose in the trough).

[theblackhand]

And during the warmer months of the year, the breeze can be quite refreshing if you don't have AC...

[Jonathan Richards 1]

Whooshing

A paraphrase of a Douglas Adams quote, I believe.

[ComicalEngineer]

Not a chance

I have more chance of making the cut for being an astronaut on the Artemis moon mission that Crapita have of meeting this deadline.

There is no way that they can magic up a "surge team" of trained people large enough deal with the backlog in any credible timescale.

[elsergiovolador]

Re: Not a chance

How about eating Tacos on terraformed Mars.

[CrazyOldCatMan]

Re: Not a chance

I have more chance of making the cut for being an astronaut on the Artemis moon mission that Crapita have of meeting this deadline

I'm someone with the misfortune of having to use the system (fortunately, not yet retired!).

It's (checks calendar) mid-June and they *still* don't have basic functionality like amending beneficiaries. Sure, they imported (sort of - no relationship information imported as anything other than a bit of text) the info from the old system but, if you click on the link to edit the info, it still gives you an 'error connecting to the service' error. Just like it did in January.

Oh - and it still has me active in my previous public body pension - I stopped working for them at the start of February. The Annual Benefit Statement that they generated is just a re-tread of the one the previous people did in 2025, not the one for 2026.

So I have no idea whether the redundancy cash (all the money over the £30k tax-free) *has* actually gone into my pension or is just sitting in a holding pen somewhere with Capita wondering where to apply it.

Strip them of the contract and sue them for wasting public money.

[RJW]

Re: Not a chance

Plus you need competent people with the domain knowledge for civil servant pensions. Just throwing people at a problem isn't going to help.

[Anonymous Coward]

Perhaps Civil servants may learn

Though I doubt it

[Aladdin Sane]

Re: Perhaps Civil servants may learn

Go on, comment under your actual handle. Own this blistering hot take.

[LessWileyCoyote]

Re: Perhaps Civil servants may learn

Civil servants often have little to no option in cases like this. Their jobs can depend on being seen to comply with requirements laid down by their political masters, regardless of whether those requirements are wise, affordable or even achievable.

[Spazturtle]

Re: Perhaps Civil servants may learn

The idea that civil servants are beholden, or even listen to elected politicians is laughable.

[Anonymous Coward]

Re: Perhaps Civil servants may learn

You also need to remember that there are many levels of civil servant - and most of us have zero influence on stuff like this. Also bear in mind that multiple grades are now "minimum wage" due to year-on-year real-terms pay cuts (I'm not far above that ... for now) - you have to get quite a bit up the greasy pole to be the "overpaid fat cats" some of the tabloid press would like to describe us as.

[elsergiovolador]

Re: Perhaps Civil servants may learn

Civil Servant seeing odd things can absolutely say it through available channels and "sort it" - at least place it on record that concern was raised.

[Anonymous Coward]

Re: Perhaps Civil servants may learn

Indeed we can, and on occasions I have done.

But, as per other messages, like the other 99+% of CSs, I've had zero visibility or involvement in this procurement. This is something being done to us, not by us.

We are also bound by the civil service code, and that does restrict how "blunt" one can be when describing things - or organisations - as our HR department seem fond of reminding me :(

[TDog]

Re: Perhaps Civil servants may learn

And, to the nearest 100, how many civil servants lost their jobs or were formally censured under those requirements in the last accountable year? Shit may happen, but it would appear that sufficient paperwork is created to CYA, let alone wipe it. Sadly there is no steaming pile of turd icon.

[heyrick]

And what will the penalty be?

Let's start with full reimbursement of money paid, plus additional compensation for failure to deliver the goods.

I mean, a basic failure clause was written into the contract, right?

Don't answer. It's a rhetorical question. The "penalty" will be the usual - throw more taxpayer money at it, which is hardly an incentive to get the job done...

[Anonymous Coward]

Re: And what will the penalty be?

The penalty will be for Crapita to get awarded more contracts that they fail to fulfill.

[The man with a spanner]

Re: And what will the penalty be?

The penalty should be:

Recompence for those affected.

The contract only starting at the coint that capita delivers a system that meets contractual requirenents. Ie when the thing is fixed and is handed over then you start paying for it.

[CrazyOldCatMan]

Re: And what will the penalty be?

The "penalty" will be the usual - throw more taxpayer money at it, which is hardly an incentive to get the job done...

Usually the penalties come in the form of Service Credits - which reduce the amount a contractor can charge. Usually enough to make them whimper a bit but not enough to drive them into bankruptcy.

Sadly.

[elsergiovolador]

Irony

Civil Service hoisted by their own petard.

I cannot stop laughing.

[elsergiovolador]

Re: Irony

The downvotes are misreading the joke, so let me make the serious version of it.

For over a decade the people now discovering that their pension portal renders dummy header text were, collectively, the procuring authority for the same outsourcer's adventures in disability assessment, benefits administration and assorted public-facing misery. The Crapita name on a contract has been a reliable leading indicator of degraded service for years. PIP claimants got reports the DWP's own audits graded unacceptable. The difference is that when a disabled claimant's assessment was defective, there was no Minister for the Cabinet Office setting a June deadline and promising to pull every available commercial lever. There was a tribunal queue and a goodwill payment that, in a fair number of upheld cases, never actually got paid.

So what's instructive here is not that Crapita failed. Crapita failing is the null hypothesis. What's instructive is the speed of the institutional response now that the harmed party is the institution itself. A barely functional portal supporting 1.5 million people produces an urgent recovery plan within months. A defective assessment regime affecting a comparably vulnerable population produced, for years, a departmental spokesperson refusing to say whether it was concerned.

The body that waved Crapita through performance checks, that treats "all available commercial levers" as something you reach for only when your own staff are affected, is the same body that signed off on the public-facing contracts and then declined to manage them.

Enjoy the recovery plan. It's a good one. Plenty of people could have used it.

[Excused Boots]

Re: Irony

it’s a shame that you had to explain it. I thought that the meaning of the post you had to respond to was obvious - apparently not.

[Anonymous Coward]

Re: Irony

Err, neither I, nor the other 99+%, had anything to do with this. We aren't even working for the department that procured it. One one of my projects, I'm working with a colleague that cancelled retiring because fo this f'up - and like me, neither him nor his employing department had anything whatsoever to do with it. From memory, there are something like 500k civil servants working for something like 200 departments/agencies - only a handful, in one department, will have been involved in this.

[Tron]

Awkward.

Alongside the endless demands for geopolitically secure contracting and not being reliant on foreign companies, we have one where the previous vendor and the current vendor are UK entities and are both failing.

[Ian Johnston]

And Crapita gets another juicy government contract in 5 ... 4 ... 3 ... 2 ...

[ecofeco]

WHOCOULDAKNOWED?!

Gee, what a surprise.

[John70]

When has any of Crapita's systems been on time and in budget?

Need to stop using outsourcing companies

[WSWS]

No, you need to stop using *that* outsourcing company.

[CrazyOldCatMan]

No, you need to stop using *that* outsourcing company.

Outsourcing has a clear use case - bringing in temporary expertise that you lack.

The outsourcing model that Crapita et. al. use doesn't do that. It destroys incentive to improve, destroys specialist site knowledge and is actively hostile to doing a good job for the end user because what matters to the outsourcer is "can I make as much money as possible?" and "can I avoid getting sued?".

[Anonymous Coward]

In house

Cheaper

Faster

Better

AI can make the tea.

[Anonymous Coward]

Re: In house

Cheaper, faster, better.

Possibly, IF the right team is put in place, permitted the funding to do it right, and free from the sort of political interference that routinely kills projects. That's a lot of "IF"s, and when it's in-house there aren't the protections from a contracted outsourcer who can turn round and tell the interfering ****s "not in the contract, if you want it, that'll be a fresh wad of Doddies please". An in house team is unlikely to have the support from senior management to turn around to interferers and tell them to wheel and ambulate. As a result, project suffer from scope creep and constantly changing targets, with insufficient funding. I think anyone who knows even chapter 1 of a project management intro text will recognise that those are the ingredients for a monumental failure.

[theblackhand]

Won't someone think of the poor AI?

When people say how great the AI future is, they never mention the poor AI bots summoned by Crapita and forced to do unholy things.

Or maybe I'm being pessimistic and we will get an updated, AI version, of the four Yorkshiremen?

[anonymous boring coward]

The good thing with computers is that solutions are scalable, as software can be easily distributed, and things are properly standardised.

However, a mere £239 million won't go very far...

[Lazlo Woodbine]

Of course it it

As Douglas Adams said, "I love deadlines. I love the whooshing noise they make as they go by."

Capita won't care, they'll still get government contracts, which they'll continue to handle appallingly...

[tip pc]

Time the Home Office insourced these systems

its constant doom and gloom with outsourcers blamed for everything.

its time the government in sourced some of these things.

set up a government of IT department & gather the best minds from the industry to do these IT projects in house.

Costs will go down & liability will remain within government where it actually exists instead of trying to palm it off on 3rd parties who get rewarded with ever more contracts to fail.

[PC Paul]

Hmm. I retired recently and was counting on my civil service pension (from a long stint twenty years ago) starting up later this year to make the numbers balance

Looks like I have an interesting time ahead!

[Taliesinawen]

Tech outsourcing company ..

> The tech outsourcing company's leadership had promised that using Microsoft's AI would improve the service, but the investment has yet to help it reach the terms of its contract with the Cabinet Office.

There's your problem. IT is so critical to any modern business that it must be kept in-house. Regardless of any savings by the bean-counters.

[CrazyOldCatMan]

Re: Tech outsourcing company ..

Regardless of any savings by the bean-counters

It doesn't actually make any savings. What it does do is move the spend from capital/personnel budgets [1] to the revenue budget [2].

So you get rid on on-site servers because the cost for those comes out of the capital budget and means you can get rid of some staff, making the HR budget look better. And end up spending a *lot* more money (usually) with people who charge you three times for each individual item..

[1] The public bodies capital budget have been slashed to the bone. My previous place, it went down by 90%. And that wasn't our decision, that was the Government. So, even if we had wanted to, we couldn't have carried on as we were.

[2] Dunno what other places call it - the budget that you spend on monthly running costs that are not counted as capital assets. So, Azure costs, contractor hire etc etc. - all revenue spend. And the accountants like it because no amortisation or residual value calculation. So, even if you spend in one month what your capital budget used to be for a year, the accountants are happy..

[Anonymous Coward]

How Crapita win business and tenders

Is beyond belief, the decision makers must not be learning from past performances

[I could be a dog really]

Re: How Crapita win business and tenders

One of the problems is that there are few businesses who can take on this scale of project - very very few. And let's face it, none of them have a particularly good track record. It's a bit like trying to choose a security consultant when your only options are Reggie or Ronnie.

[Throg]

Not Letting Crapita Off The Hook...

...but what about the internal stakeholders? They must have signed off on this clown car. When will they be held to account?

Of course this is a rhetorical question.

[BillyBastard]

The essential question that remains unaddressed is whether the Cabinet Office conducted the due diligence of security, resilience and business continuity that is mandated in HMG’s own commercial policy.

If they did, then the door is open to punitive damages being sought from Crapita, if they did not, then those accountable at the Cabinet Office ought themselves to face disciplinary action.

[Sub 20 Pilot]

There should be a committee of experts who set out the requirements for any public sector contracts. These committees should have no politician or civil servant anywhere near them. They should comprise of IT specialists, financial and legal experts and people who understand how to prepare and administer a contract.

There should be strict penalties for incompetence, lack of progress and downright apathy when things go wrong, payable by the execs of the contracted company and easily implemented.

Most of these contracts are databases and we as a race have had decades of producing them. if something is too complex then break id down into smaller parts. There is no law that says that these hideous projects should do everything badly as opposed to some things well. Claiming you didn't understand the requirements and then asking for more time and money shoyld not be entertained and should be penalised financially.

There is no incentive for these fucking crooked shysters doing what they like as winning a contract seems to be like winning the lottery every week.

Until these happen then the usual crowd will get billions of our tax money on a regular basis, whoever is running the treaasury.

We are not as bad as the US but we are getting there. There has to be a massive backlash against the mega companies and the billionaire class otherwise there is no future.I would never condone violence but if these fuckers had all ther money taken off them and be thrown in jailit would be a good start. Do it to a few and the others soon shape up or fuck off.