{"slug": "crapitas-ai-enabled-pension-scheme-is-a-car-crash-is-it-time-hmg-in-sourced-more", "title": "Crapita’s “AI-enabled” pension scheme is a car crash – is it time HMG in-sourced more services?", "summary": "The UK National Audit Office is investigating Capita's delivery of the £239 million Civil Service Pension Scheme after key service levels were repeatedly missed, with the outsourcer having paid out £4.8 billion to more than 700,000 members. Capita CEO Adolfo Hernandez told MPs the scheme was \"very complex; more complex than we thought, realistically,\" and blamed 20 million incomplete, missing or inaccurate member service records for complicating automation, while Capita Pension Solutions managing director Chris Clements said, \"I am sorry that the technology we have deployed did not work in cases.\" Paymaster General Nick Thomas-Symonds said he is exploring all commercial, legal and operational options, including the long-term feasibility of a full in-house delivery model, for a payroll covering 780,000 people.", "body_md": "In November 2025, a senior British government minister was [__told__](https://committees.parliament.uk/oralevidence/17925/html/?ref=thestack.technology) by the CEO of outsourcer Capita that with the company’s help “the UK Government would be presiding over the largest AI-enabled pension in the UK… a flagship use case.” \n\nA year later the company – which won a £239 million contract to deliver the Civil Service Pension Scheme, starting December 2025 – has served up a shit sandwich for retired civil servants, auditors are being called in, and the minister is fuming.\n\n### Damn, this is tricky work actually\n\nAnd, having won the tender, Capita’s CEO Adolfo Hernandez then admitted to MPs in July that that scheme is “very complex; more complex than we thought, realistically.”\n\n“Key service levels have been repeatedly missed,” the National Audit Office (NAO) acknowledged today. It will now be investigating Capita’s delivery of the scheme.\n\nCapita [__said__](https://www.capita.com/news-and-insights/news/2026/capita-statement-nao-review-csps?ref=thestack.technology) today it “recognises the need for continued service improvement, and we are implementing further automation [and accepts] that performance remains below the standards that scheme members and the Government rightly expect.”\n\n*“I am sorry that the technology we have deployed did not work in cases” – Capita Capita Pension Solutions’ Managing Director, Chris Clements*\n\n### 25,000 calls a day, at first...\n\nCapita’s Clements earlier told MPs that the firm has paid out £4.8 billion to more than 700,000 members, adding that the firm had “stood up a call centre to take 7,000 calls a day, and we were receiving 25,000 calls” when it took over the pension scheme.\n\nIn an oral evidence session in July, MP Simon Hoare said: “Government awarded the contract to Capita principally because of their commanding narrative around digital data handling and AI. Either they lied to secure the contract, or they have been let down by a third-party supplier, or the scrutiny of the Cabinet Office to double check what they were being sold in the bidding prospectus was not done...\"\n\n“It could be a lethal cocktail of all three,” he mused.\n\n### Data \"incomplete, missing, or inaccurate\"\n\nCapita has blamed bad data for many of its failures, saying missing service records, data showing government departments that no longer exist and other data issues had complicated efforts to automate some of its work.\n\n*“The sheer scale of the data that was missing upon transfer is huge. We are talking about 20 million records, and these are effectively members’ service records that were either incomplete, missing or inaccurate ” – Capita CEO Adolfo Hernandez* \n\nThe government has a range of contractual levers to punish Capita for its poor performance, including withholding payments – and explored in-sourcing the work.\n\n### An \"in-house delivery model\"?\n\nThe UK’s Paymaster General, Nick Thomas-Symonds told MPs over the summer that “I am actively, with my team, exploring all commercial, legal and operational options, including testing… the long-term feasibility of a full in-house delivery model.”\n\nHe added, however, that “it would be totally irresponsible to just walk away [from the contract provider] when you have a payroll here of 780,000 people.”\n\nThe general secretary of the UK’s trade union for civil servants, the FDA, __meanwhile__ [__opined__](https://www.civilserviceworld.com/professions/article/an-uncomfortable-reality-we-have-to-make-the-capita-contract-work?ref=thestack.technology) last month in the “Civil Service World” publication that “‘Insource Now!’ may make a good war cry for those standing with placards and pitchforks, but it is not a viable solution to the hardship and uncertainty faced by current and retired civil servants.”\n\nCapita won delivery of the pension scheme from another struggling/failing supplier, MyCSP. In an April 2026 letter to the chairman of the Public Accounts Committee, that supplier warned that December 2025’s go-live with Capita was premature.\n\nThe company warned MPs in the letter that: “We do not believe that these activities were carried out to the level of detail and thoroughness required for such a major transition. As a result, the risks associated with not having a robust transition/cutover process in place were not fully understood or mitigated prior to transition.”\n\n### \"Synergy\" ERP fears\n\nCat Little, at the time Civil Service COO, told MPs in July: “One of our really basic problems is making sure that we have continuous service data.\n\n\"Because there are so many different HR and data collection systems across Government… getting accurate data quickly and efficiently is one of the big challenges to the complexity of this scheme.\n\nShe added: “That is why shared services and us moving on to a single enterprise technology platform, so the civil service can manage its people and their data more effectively, is intrinsic to what we are doing here…”\n\nThe company tasked with delivering that work? Capita.\n\nThe outsourcer has been contracted to support the 10-year “Synergy” overhaul of ERP systems across four major government departments, under a £370 million contract that will see half the civil service’s staff moved to a single Oracle SaaS system for finance and human resources.\n\n(The Department for Work and Pensions (DWP), Ministry of Justice, DEFRA; and the Home Office are teaming up for that project.)\n\nThat £1 billion+ government ERP modernisation programme aims to deliver shared corporate services for some 250,00 civil servants, with a common operating model and single SaaS platform (Oracle) backed by common data standards. Deloitte and IBM are also [__supporting__](https://www.thestack.technology/oracle-ibm-deloitte-win-700m-synergy-programme-for-hmg/) project delivery for Synergy. \n\nWill that also turn out to be \"more complex than we thought\" for Capita?\n\nWatch this space.\n\n*Should HMG be taking more project delivery in-house, including across large technology programmes? Affected by the Civil Service Pension Scheme’s failures? Involved in project delivery? Want to share views in confidence? ed@thestack.technology / Signal @Targett.11*", "url": "https://wpnews.pro/news/crapitas-ai-enabled-pension-scheme-is-a-car-crash-is-it-time-hmg-in-sourced-more", "canonical_source": "https://www.thestack.technology/capita-civil-service-pension-scheme-failures/", "published_at": "2026-10-02 13:06:39+00:00", "updated_at": "2026-10-02 13:06:58.403506+00:00", "lang": "en", "topics": ["ai-policy"], "entities": ["Capita", "National Audit Office", "Adolfo Hernandez", "Chris Clements", "Nick Thomas-Symonds", "Civil Service Pension Scheme", "MyCSP", "FDA"], "also_reported_by": [], "alternates": {"html": "https://wpnews.pro/news/crapitas-ai-enabled-pension-scheme-is-a-car-crash-is-it-time-hmg-in-sourced-more", "markdown": "https://wpnews.pro/news/crapitas-ai-enabled-pension-scheme-is-a-car-crash-is-it-time-hmg-in-sourced-more.md", "text": "https://wpnews.pro/news/crapitas-ai-enabled-pension-scheme-is-a-car-crash-is-it-time-hmg-in-sourced-more.txt", "jsonld": "https://wpnews.pro/news/crapitas-ai-enabled-pension-scheme-is-a-car-crash-is-it-time-hmg-in-sourced-more.jsonld"}}