Email your MP about the Capita civil service payroll contract

Capita, which is currently failing to pay pensions to thousands of retired civil servants has been awarded a contract worth up to £950m over 10 years to run HR and payroll services for more than 250,000 civil servants, across some of the government’s largest departments.

The proposed deal sits within the government’s “Synergy” shared services cluster, part of a wider strategy to replace 286 legacy systems with five major platforms through a single cloud-based Oracle Enterprise Resource Planning (ERP) system covering HR, payroll, finance and procurement.

The Department for Work and Pensions (DWP), acting as the lead department for the programme, has selected the outsourcing company as preferred provider for payroll covering staff in the DWP, Home Office, Ministry of Justice and the Department for Environment, Food & Rural Affairs.

PCS has branded the decision a “reckless gamble” with civil servants’ livelihoods, warning that any disruption to pay would have immediate consequences for staff, many of whom already face below-inflation wages and are struggling to get by.

Capita already has a track record of serious failures. Handing the company responsibility for paying a quarter of a million civil servants risks importing that chaos directly into monthly pay packets.

The current pensions crisis is not an isolated incident. Capita’s handling of Army recruitment fell so far short that, in 2024, the Defence Committee confirmed plans to replace the contractor after it achieved just 63% of its recruitment target — the worst performance in five years.

Last year, the Information Commissioner’s Office fined Capita £14 million following a data breach linked to a 2023 cyber incident, that exposed the personal information of millions.

PCS have been clear with the Government they must reconsider this decision and support our wider demands to the Cabinet Office including:

•         Insourcing of all outsourced work

•         Repatriation of any and all offshored data and processing to the UK Civil Service

•         A guarantee of no redundancies (voluntary or compulsory) arising from SSC changes

•         Immediate action on common SSC issues (e.g., pay errors, pension calculations)

•         Establishment of a Cluster level consultation framework

•         Establishment of a national SSC Strategy consultation framework.

In other clusters, where PCS has been properly involved in negotiations since the establishment of the Shared Services Strategy in March 2021, we have seen more positive outcomes, such as:

• HMRC/Unity Programme: Previously outsourced work delivered by Arvato has been insourced, with staff transferring into HMRC under TUPE.
• Matrix Cluster: Although software provision has been outsourced, early plans for full privatisation were halted, keeping the work within the public sector - though risks to Civil Service jobs remain.

Act now and write to your Member of Parliament, asking them to support our demands and to write to the Minister for the Cabinet Office, asking him to work with our union to get the Government to urgently reconsider their decision.