Civil service pension backlog 'overwhelmed' Capita, boss says

Bosses at embattled Capita have apologised for the saga which has left thousands of retired civil servants without pension payments.

Capita took over the administration of the Civil Service Pension Scheme in December, but said it inherited a backlog of 86,000 cases and more than 15,000 unread emails - but this had now expanded to 120,000 cases.

Richard Holroyd, chief executive of Capital Public Services, told a committee of MPs that the backlog "overwhelmed" the company, which had now almost doubled staff working on the scheme.

People trying to phone the company for information about their pension have waited several hours for a response, with some unable to pay bills.

Julie Morton has terminal cancer and has been struggling to access her pension.

"My life expectancy was originally 12 months back in August last year. Six months down the line, I have not been able to make any memories with my family because I've got no income," she said.

"I've only got a certain amount of money to see me through each week. I should be making memories and enjoying my time with my family, my children, my grandchildren, my friends, my elderly parents, and I can't."

Some of those affected have had no contact from Capita whatsoever. It took over the administration of the scheme from MyCSP.

Appearing before the Public Accounts Committee, Capita bosses said they were surprised by the extent of the issue the company inherited.

But Holroyd said: "We now own this problem. It is ours to fix and ours to fix at pace."

Apologising for the situation, he said the service was not what retired civil servants deserved. Staffing had increased from 400 at the time of the handover to 750 now.

Chris Clements, managing director at Capita Public Services, said calls about bereavement and hardship were being answered quickly, but others had "unacceptable" waits.

He said some payments would be made to the most serious cases by the end of February, and they would receive a normal service by the end of March.

He said anyone who needed to get in touch should use the "contact us" tool on the front page of its website.

An emergency interest-free loan system has been set up, with newly retired people applying to their former employer, and those who retired more than 12 months ago being directed to apply to Capita.

But the scheme has been criticised as placing a further burden on the public purse, and forcing applicants to go through a humiliating process to "prove" they are experiencing hardship.

Hazel Cranstoun, from Arran in Scotland, worked for the Cabinet Office and left the civil service in 2011 to care for her mum.

She now runs the village shop in Pirnmill and was counting on getting her civil service pension to clear debts and ensure the future of the shop.

At one point she spent over four hours on the phone to Capita.

"I missed my mortgage payment on 20th January and other payments too. I'm terrified about impact on my credit rating which is important. I'm determined to keep the shop open, it's an important part of the community.

"I called to arrange an emergency loan, and was told to approach Capita as I'd been out of service longer than 12 months. When I called Capita, they said I should contact the DWP, and that Capita only deal with certain cases.

"I've got no savings and my credit cards are all maxed out from keeping the business afloat. I planned carefully that the pension would clear this debt."

In response to the emergency loan scheme, Fran Heathcote, general secretary of the PCS union, said: "Civil servants who have worked their whole lives in public service should never be forced into hardship because a private contractor has failed to deliver the most basic standard of pension administration.

"Yet thousands have been left without income for months, pushed into debt, unable to heat their homes, and even relying on family for food, a humiliating and distressing position no one should ever face."

She said the government's decision to offer emergency interest-free loans provided some short-term relief, but did not fix "injustice".

"Our members deserve dignity, certainty, and financial security in retirement, not emergency loans to survive failures outside their control," she said.

Additional reporting by Marta Newman