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1Repair Windows errors before they cause bigger problems2Fix the driver behind crashes, sound loss and screen glitches3Clear out junk files and repair common Windows errorsIt is reasonable to ask whether the government should bring the Civil Service Pension Scheme (CSPS) back in-house after a troubled start under Capita. But as of 3 October 2026, the government has not decided to insource the scheme, and the National Audit Office (NAO) has not completed its new investigation. The immediate priority is stabilising service without interrupting pensions; the longer-term question is which delivery model can do that reliably.
What went wrong when Capita took over civil service pensions?
Capita took over CSPS administration from MyCSP on 1 December 2025, under a £239 million, seven-year contract following a two-year transition, according to the NAO’s work-in-progress page. The figures reported for the backlog differ by source and date: Capita said in its 2025 results, published in 2026, that it inherited 86,000 cases, above forecast; in the Commons on 6 July 2026, Paymaster General Nick Thomas-Symonds said the unresolved backlog had risen to 120,000. These are separate snapshots, not interchangeable counts.
The service problems followed a period of difficulty before the transfer too. In a June 2025 report about MyCSP’s administration and Cabinet Office oversight, the NAO recorded 4,780 complaints in 2024–25, three missed Capita transition milestones and plans for a phased reduction in functionality at launch. Those findings describe the pre-transfer period; they are not an audit verdict on Capita’s later performance. See the NAO’s 2025 report.
By the end of June 2026, Thomas-Symonds told MPs, more than 6,700 past-retirement quotations and more than 4,100 actionable bereavement cases were still outstanding. He said more than 140 officials had been deployed to recovery work and £9.9 million had been withheld from Capita. The figures convey the stakes: delays affect members approaching retirement and families dealing with a death, not just a service-level dashboard.
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In a statement on 2 October 2026, Capita said it had made operational progress in August and September while acknowledging that performance remained below expected standards. That is the company’s account of its progress, not independent confirmation that the service has recovered. Capita’s reported 24.7% year-on-year growth in adjusted revenue for Pension Solutions in the first half of 2026 is a company financial measure, not evidence of CSPS service quality.
Has the government decided to bring the scheme in-house?
No. In the Commons on 6 July, Thomas-Symonds said, “if I could insource this operation today, I would do so,” but immediately qualified that position: “I cannot replace a complex pension operation overnight.” He also said the episode showed “the severe limitations of outsourcing the civil service pension scheme.” The comments signal a serious interest in insourcing, not a decision or a timetable. The government says it is exploring structural options, including potential insourcing, while pursuing commercial remedies and independent scrutiny.
The government has also announced a policy requiring an in-house viability assessment before renewal of contracts worth more than £1 million from April 2027. That creates a framework for considering future choices; it does not predetermine the CSPS decision.
Why can’t the government just cancel Capita’s contract?
Because administration includes live pension payroll and essential member services. The government says an abrupt termination would risk severe disruption and that a complex operation cannot be replaced overnight. Ending the contract without a ready alternative could compound the harm to members while the backlog remains unresolved.
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Withholding payments and adding officials to recovery work are ways to apply pressure and support stabilisation while continuity is protected. They do not, by themselves, establish that the contract should continue long term. Immediate recovery and future ownership are separate decisions.
What should determine the long-term delivery model?
Neither public ownership nor outsourcing guarantees a reliable service. The choice should turn on demonstrable capability, continuity and accountability—not a presumption that one model is inherently better.
| Decision test | What government should establish |
|---|---|
| Continuity and risk | How payroll, retirement payments, bereavement cases and member contact would continue during a transfer, and what contingency arrangements would protect members if milestones slipped. |
| Operational capability | Which model can provide experienced staff, dependable systems, usable data and enough capacity to resolve both routine work and complex cases. The NAO’s new review is examining transition readiness and delivery, but has not yet reported findings. |
| Accountability and control | Whether service levels are measurable and enforceable; whether management information is reliable; whether audit access is adequate; and whether government can intervene effectively when delivery falls short. |
| Whole-life value and resilience | The full cost of contract delivery or in-house capability, including transition, staffing, systems and data stewardship, weighed against promised efficiencies and the ability to sustain a stable service. |
The government’s case for change should be tested against evidence on all four points. An in-house option needs a credible workforce, operating plan and safe transition, not just a change of ownership. A continued or replacement contract needs enforceable standards and evidence that the supplier can meet them. The NAO’s earlier report also shows why transition planning and government oversight matter whichever model is chosen.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What is the NAO investigating?
As of 3 October 2026, the NAO’s post-transfer investigation is in progress and listed as due in Winter 2026/27. Its scope covers the transition, Capita’s delivery since go-live, member experience and Cabinet Office oversight. The NAO says key service levels have repeatedly been missed, but its new review has not yet published findings, causes, accountability conclusions or recommendations. Those should not be treated as settled before the report appears.
The NAO’s work-in-progress page also reports that £22.1 million in transitional support loans had been paid to more than 3,900 members by August 2026. That is an additional measure of the effect of the disruption; it is not the same as the outstanding case count.
Is it time for HMG to insource more services?
The CSPS experience is a strong reason for government to scrutinise outsourcing more rigorously and to assess in-house alternatives before committing to future contracts. It is not yet evidence that every outsourced public service should be brought back inside government, nor does it settle which model will best serve pension members over the long term.
For this scheme, the defensible course is to separate urgent stabilisation from the ownership decision: protect uninterrupted payments and clear high-impact work now, while comparing in-house and outsourced models against transparent tests of capability, continuity, accountability and whole-life value. That is an assessment of the choices the record presents, not a government decision.
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