When a government outsourcing contract goes wrong, the argument follows a familiar path. The supplier is incompetent, outsourcing is the problem, and someone should go to prison. Some of that may well be true of Capita and the Civil Service Pension Scheme (CSPS). But look at what actually failed. A data migration went live after one rehearsal and no parallel running. The outgoing supplier warned the Cabinet Office it wasn’t ready, five months out. Somebody said yes anyway. That decision is the one worth examining, and moving the scheme in-house doesn’t change who made it.
What went wrong, in the order it went wrong
The Cabinet Office awarded Capita a £239m, seven-year contract in November 2023 to take the scheme over from MyCSP, with two years of transition before a go-live on 1 December 2025.
By March 2025 Capita had missed three of the six transition milestones due and the Cabinet Office had withheld £9.6m. The National Audit Office (NAO) reported that in June, with a line I keep going back to: contingency plans were “being developed”, “but as of May 2025 nothing has been agreed”.
In July 2025 MyCSP raised its concerns about Capita’s readiness with the Cabinet Office. Through September the two negotiated a fallback, a draft contract keeping MyCSP on for a further three months, ready for signature in October. On 14 and 24 October MyCSP wrote formally to the scheme board and to the Cabinet Office, restating that Capita did not appear ready.
On 24 October the Public Accounts Committee (PAC) published its report. Of the eight milestones that had passed, one had been delivered on time. There was “a clear risk that Capita will not be ready”. The worst-case plan was to stay on MyCSP’s systems, except there was no agreement with MyCSP to do that.
On 11 November 2025 the Cabinet Office Permanent Secretary wrote to the committee: due diligence was complete, Capita had “provided the assurances I required”, and the transfer was approved. Four areas were still being mitigated three weeks out: payroll, security, testing and disaster recovery. The letter also promised that “the adoption of AI” would improve the service over time (it hasn’t, and this post isn’t about that).
Capita went live on 1 December. By January an HMRC troubleshooter was leading an “urgent recovery plan”. In February Capita told the PAC it had inherited 16,000 unread emails and 20 million database errors. By September the government had approved over £100m in interest-free loans for people whose pensions hadn’t arrived, and made more than 4,100 of them.
One dress rehearsal is not a migration plan
The document that matters most is the one hardly anyone has read: MyCSP’s letter to the PAC of 2 April 2026. Strip out the argument about whose backlog it was (MyCSP says it has no record of 20 million corrupt lines) and what’s left is a description of the cutover.
MyCSP was invited to one dress rehearsal of the data migration. It was “not included in any subsequent dress rehearsal activities or any parallel running of operations”. In its words, “this is not considered normal practice for a transition of this scale”.
Well, no. It isn’t.
A dress rehearsal takes the real data, at real volume, through the real process against the clock. The first one always finds things. The second tells you whether you fixed them. Parallel running is the other half: old and new side by side on the same day’s work, comparing outputs before anyone’s pension moves. It’s expensive and boring, and it’s the only way to know the new system produces the same numbers as the old one. You can’t do it without the outgoing supplier, and the outgoing supplier says it was never asked.
TSB’s 2018 migration is the usual cautionary tale, and it pays to be precise about it. TSB’s own press release talks of “nine successful dress rehearsals and transition events”. The Slaughter and May report is stricter with its terms. The transition events were seven early cutovers and a staff pilot, which the review found “ultimately of limited value” (paragraph 10.31). The dress rehearsals were real-time practice runs of the data migration, and by go-live “TSB and SABIS only conducted one full ‘real time’ ETL event” (paragraph 11.44). One. The data migration happened to work. What broke was the platform underneath it, performance-tested in a single data centre, and the board went live on a letter from the supplier’s managing director rather than “a formal, evidenced attestation” (paragraph 2.50).
July 2025: the warning that was heard and overruled
The warning didn’t go missing. The outgoing supplier told the client, in the formal governance forum, in July. The client took it seriously enough to negotiate a three-month extension. The contract was drafted, agreed and ready to sign.
And then it wasn’t signed.
The Permanent Secretary’s letter says the decision rested on Capita’s assurances plus the department’s own risk assessment. Ten months later Charlie Dewhirst asked the minister who authorised the go/no-go and on what criteria. The answer was that it predated her, and that it “was based on evidence requested from Capita about capability and readiness in critical delivery areas”.
Evidence requested from Capita. Not evidence from the rehearsals, because there’d only been the one. Not from parallel running, because there wasn’t any. A client asked its supplier whether the supplier was ready, and the supplier said yes.
That isn’t a sneer at the people involved. It’s the normal failure mode, and I’ve watched it at a fraction of this scale. Asking “are you ready?” doesn’t test readiness. It collects a promise.
Insourcing changes the badge, not the cutover gate
So now the government is “actively shaping a long-term strategy to bring this pension scheme back in-house”, and Ian Byrne opened the Westminster Hall debate by calling this “the failed ideology of outsourcing laid bare”.
In my opinion that’s the wrong lesson. Go back through the timeline and ask which event would have gone differently if the incoming administrator had been a Cabinet Office directorate rather than Capita plc.
The single dress rehearsal? A civil service team can skip rehearsals just as easily. The missing parallel run? That needs the outgoing supplier, and MyCSP was a private company either way. The unsigned contingency? That was the client’s to sign. The go/no-go made on the supplier’s word? An in-house team gives assurances too. The PAC’s own report notes this is the second time the Cabinet Office has failed to manage a transition of this scheme without a drop in service. The first was the handover to MyCSP in 2014.
Insourcing changes who holds the contract. It doesn’t produce a second rehearsal, a written readiness gate, or a person empowered to say no on the day. And the insourcing is itself a migration, which the minister has already promised will happen with “no disruption”.
Capita’s failures after go-live are its own, and the Royal Mail scheme was terminated for the same pattern in April. But the logo on the administrator’s door is not what decided whether the data was ready to move.
What a criminal candour law can and can’t reach
The third strand is the campaign to extend the Public Office (Accountability) Bill, the Hillsborough Law, to suppliers like Fujitsu and Capita. The bill creates a statutory duty of candour for public officials and makes misleading the public a criminal offence. The pensions campaign group wants it to cover every company delivering services under a government contract.
I have sympathy for that, and Horizon shows why. The Post Office relied for years on false statements from Fujitsu that the system was robust. James Arbuthnot, who has spent nearly twenty years on Horizon, says “there are arguments on both sides”.
But apply it here and see what it catches. A candour law reaches concealment. What was concealed? The NAO published the missed milestones in June. The PAC published the “clear risk” in October. MyCSP’s warnings were minuted. The go-live letter is on the committee’s website. This is one of the best-documented bad decisions I’ve seen, and every document was public before go-live.
Everybody knew. Somebody decided anyway. You can’t criminalise a judgement call, and the next Permanent Secretary facing a go/no-go won’t become a better engineer by becoming a potential defendant. They’ll become a better collector of written assurances, which is exactly what went wrong this time.
The go-live decision is the client’s product
Here’s the position, and you’re welcome to disagree with it. In a service transition, the go-live decision is the client’s product. Whoever runs the service afterwards, the yes belongs to the organisation that owns the outcome, and it’s the one deliverable you can’t procure. So what would I insist on before giving it?
The readiness criteria get written before the date is set. If the date comes first, every criterion bends to fit it, and “the assurances I required” becomes whatever the supplier can supply by then. Write down what ready means in numbers, say a full payroll run reconciling to the penny, and let the date follow.
More than one dress rehearsal, at real data volumes, with both suppliers in the room. The first is a discovery exercise. You need at least one more to prove the discoveries were fixed, and you should expect it to find something new. If you’ve only had one, you don’t know.
Parallel running with the outgoing supplier for at least a payroll cycle. The three-month extension MyCSP had drafted was the cheapest insurance in this whole story, and nobody cashed it in.
A named person who can stop it, and who is not the person who set the date. If the person who can say no is also the sponsor whose programme is running late, you don’t have a gate. You have a formality.
A rollback that has been run, not written. The PAC noted in October that the fallback was to stay on MyCSP’s systems, and that there was no agreement to do so. A rollback nobody can execute is a hope with a heading.
Who said yes to the Capita go-live? The client did. It’s in a letter, dated, on the record. The next one will be too, whoever’s name is on the building.
Sources
Administration of the Civil Service Pension Scheme (Forty-Ninth Report), Public Accounts Committee, 24 October 2025. https://publications.parliament.uk/pa/cm5901/cmselect/cmpubacc/888/report.html
Investigation into the administration of the Civil Service Pension Scheme, National Audit Office, 16 June 2025. https://www.nao.org.uk/wp-content/uploads/2025/06/investigation-into-the-administration-of-the-civil-service-pension-scheme.pdf
Letter from Catherine Little (Cabinet Office Permanent Secretary) to the PAC chair on the CSPS transition, 11 November 2025. https://committees.parliament.uk/publications/51496/documents/285705/default
Letter from Duncan Watson (MyCSP CEO) to the PAC chair, 2 April 2026. https://committees.parliament.uk/publications/52547/documents/292522/default
Civil Service Pension Scheme, Westminster Hall debate, 15 September 2026 (TheyWorkForYou transcript). https://www.theyworkforyou.com/whall/?id=2026-09-15a.573.0
Civil Service Pension Scheme, written ministerial statement, Sally Jameson, 9 September 2026. https://www.theyworkforyou.com/wms/?id=2026-09-09.hcws324.h
Thousands of unread emails and 20 million database errors cause civil service pension hardship, Computer Weekly, 12 February 2026. https://www.computerweekly.com/news/366639026/Thousands-of-unread-emails-and-20-million-database-errors-cause-civil-service-pension-hardship
Capita lacked ‘detail and thoroughness’ in planning botched Civil Service Pension Scheme takeover, Computer Weekly, 17 April 2026. https://www.computerweekly.com/news/366641895/Capita-lacked-detail-and-thoroughness-in-planning-botched-Civil-service-pension-scheme-takeover
Government terminates Capita’s Royal Mail pension contract, Computer Weekly, 22 April 2026. https://www.computerweekly.com/news/366642152/Government-terminates-Capitas-Royal-Mail-pension-contract
Government has seen enough of Capita failure and Civil Service Pension Scheme to be moved in-house, Computer Weekly, 8 September 2026. https://www.computerweekly.com/news/366650193/Government-has-seen-enough-of-Capita-failure-and-Civil-Service-Pension-scheme-to-be-moved-in-house
Capita doesn’t get to ‘walk away from’ civil service pension mess, says minister, Computer Weekly, 15 September 2026. https://www.computerweekly.com/news/366650460/Capita-doesnt-get-to-walk-away-from-civil-service-pension-mess-says-minister
Capita boss gets ‘obscene’ pay packet while retired civil servants need emergency loans, Computer Weekly, 18 September 2026. https://www.computerweekly.com/news/366650555/Capita-boss-gets-obscene-pay-packet-while-retired-civil-servants-need-emergency-loans
Hillsborough Law should catch bosses at firms like Fujitsu and Capita, Computer Weekly, 18 September 2026. https://www.computerweekly.com/news/366650656/Hillsborough-Law-should-catch-bosses-at-firms-like-Fujitsu-and-Capita
TSB Review: An Independent Review Following TSB’s Migration onto a New IT Platform in April 2018, Slaughter and May, 31 October 2019 (published by TSB with its release of 19 November 2019; paragraphs 2.50, 10.31 and 11.44 cited). https://www.tsb.co.uk/news-releases/slaughter-and-may.html