The Public and Commercial Services (PCS) union has said it felt “vindicated” by the Public Accounts Committee’s (PAC) criticism of the government’s handling of the Civil Service Pension Scheme (CSPS), arguing that the findings confirmed long-standing concerns about outsourcing and contract management.

The PAC’s report, Administration of the Civil Service Pension Scheme, concluded that poor contract management, under-resourcing and repeated transition failures have left members facing long waits, poor service and uncertainty over key reforms.

PCS said the committee’s conclusion that the Cabinet Office “has not shown that it can effectively manage the outsourced administration of the civil service pension scheme” supported its long-held position that administration should be brought back in-house.

The report also stated that the Cabinet Office “has not demonstrated it has sufficient capacity and capability to manage the MyCSP contract effectively and has now failed on two occasions to manage the transition from one supplier to another adequately”.

The union’s general secretary, Fran Heathcote, said the report made clear that privatising the critical pensions administration function “isn’t going to get you value for money”, arguing that this outcome was “inevitable when the scheme manager doesn’t have the capacity or ability to manage the contract, and there’s little or no competition in the market”.

She added that the findings were “further proof” that civil servants should administer the scheme under direct ministerial control.

The PAC report also questioned the competitiveness of the pensions administration market, noting that only a small number of providers had bid for the latest contract, potentially limiting the government’s ability to secure value for money.

It warned of “clear risks” to the forthcoming handover from MyCSP to Capita, scheduled for December 2025, after several IT milestones were missed and plans to operate with fewer staff were revealed, although Capita has since said it expects to employ more people overall once the transition is complete.

The committee called on the Cabinet Office to set out its overall commercial strategy for pension administration, including an assessment of the costs and benefits of running the scheme in-house.

PCS said it particularly welcomed this recommendation, stressing that the current outsourced model, which covers 1.7 million current and former civil servants and liabilities of £189bn, had proven “unsustainable and inefficient”.

The report also raised concerns about MyCSP’s historic lack of union recognition, recommending that the Cabinet Office ensure suppliers are committed to recognising employees' voices.

The issue has been a major factor in an ongoing strike by PCS members working for the private contractor, now in its seventeenth week.

In addition, the committee drew attention to continued uncertainty over the government’s internal “go/no-go” decision on the transfer to Capita.

While the PAC noted that the decision had not been confirmed at the time of its evidence gathering, the Cabinet Office has since stated that it has agreed to proceed and remains “confident” that the programme is on track for 1 December 2025.

PCS described the confusion as “epitomising the chaos” surrounding the administration of the CSPS since its privatisation in 2012, arguing that repeated failures to manage suppliers had “put scheme members and staff in an impossible position”.

However, in response to the report's findings, both Capita and MyCSP said they remained committed to ensuring a safe and successful transition.

Meanwhile, the Cabinet Office confirmed that it was reviewing the wider pensions administration market, exploring how to encourage new entrants, and considering the potential value of bringing some services back in-house.

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