Source · Select Committees · Public Accounts Committee
Recommendation 16
16
Acknowledged
Cabinet Office confident in its capacity to manage outsourced pension contract risks
Recommendation
We questioned the Cabinet Office about how we can be assured that it had the capacity to ensure that contractors deliver. The Cabinet Office said that it is fairly confident it has the right expertise and capacity to manage the contract, and that the contract management team is significant in size, with around 60 FTEs overseeing outsourced pension arrangements.32 We inquired further how the Cabinet Office can be sure that MyCSP’s performance will not get worse towards the end of its contract, and that Capita will avoid getting into difficulties. The Cabinet Office stressed the importance of making a success of the transition. It asserted that it had made changes to the way in which it transitions as a result of previous lessons learned, and that it would impose financial penalties on Capita from December in cases of underperformance. The Cabinet Office said that it will reset its transition plan in September, and that it would not go through with the transition if it was not confident that the service levels would be maintained.33 TUPE negotiations and staff concerns
Government Response Summary
The government agrees with the recommendation and states the new contract contains 38 Performance Indicators (PI), broken down into Key Performance Indicators (KPIs) and Subsidiary Performance Indicators (SPIs) which cover all aspects of service delivery and allow for financial penalties.
Government Response
Acknowledged
HM Government
Acknowledged
3. PAC conclusion: 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 adequately manage the transition from one supplier to another. 3b. PAC recommendation: [The Cabinet Office should set out in its Treasury Minute response:] • what measures it intends to put in place to ensure adequate customer service from suppliers in the transition period between contracts. 3.7 The government agrees with the Committee’s recommendation. Recommendation implemented 3.8 The Cabinet Office has a number of levers in the new contract that can be utilised if service were to deteriorate in any period including any transition period. 3.9 The new contract contains 38 Performance Indicators (PI), broken down into Key Performance Indicators (KPIs) and Subsidiary Performance Indicators (SPIs). These cover all aspects of Service delivery, including data accuracy, member communications, statutory requirements, benefits calculations and accuracy, employer interfaces, transfers in and out, overpayments, complaints and IDRP, revisions, quotes etc. 3.10 If the level of performance of the Supplier during a Service Period is below the Target Performance Level in respect of a KPI, or the Supplier fails to rectify an applicable Minor KPI Failure within the Tail Fail Period, Service Points shall accrue to the Supplier as defined in the contractual Key Performance Indicator. 3.11 Thresholds for failure fall into three primary categories: Minor, Serious and Severe. Minor failures do not normally invoke Service Points, unless it is a repeat failure or is not rectified within the Tail Fail Period. Serious and Severe failures will invoke Service Points based upon the severity of the failure. 3.12 The government has reviewed the current contract and ensured that they have tightened the commercial leverage available linking to the above measures to ensure poor performance can be appropriately penalised. 3.13 This includes call answer rate and the payment of pensions and lump sums.