Capita helped the Cabinet Office write the government's rulebook for what happens when an outsourcer collapses. Its own pension contract shows what happens when one does not.
Estimated reading time: 12 minutes
In short. The Sourcing Playbook is the Cabinet Office's rulebook for how every central government department buys outside help, and most of its eleven key policies exist to manage one risk: a supplier collapsing mid-contract. Capita was one of the firms that helped shape the rulebook's first edition in 2019. In December 2025 Capita took over the Cabinet Office's own Civil Service Pension Scheme, 1.7 million members, 189 billion pounds in liabilities, without coming anywhere near insolvency, and the transition still went wrong in almost every way the Playbook says good data, real monitoring and enforceable targets are meant to prevent. Six documented mistakes: three stars.
Picked from the registry's queued Tier 3 entries: a document that scores highest on every criterion CLAUDE.md sets for deep editorial treatment, sector spend above a billion pounds, first-of-kind framework claims, and a live, checkable contradiction against real award data. This is a Tier 3 deep teardown: the document's own words, tested against the fullest evidence the record allows.
The rulebook Capita helped write
On 20 February 2019, thirteen months after Carillion's compulsory liquidation on 15 January 2018 [1] left hundreds of public contracts without a working supplier overnight, Cabinet Office minister Oliver Dowden launched the Outsourcing Playbook [2]. Jon Lewis, then chief executive of Capita, one of the suppliers government "worked with to develop the new measures", welcomed it: "This is fundamental to the successful procurement and delivery of public-sector contracts," he said [2]. A second edition in June 2020 rebranded the document as the Sourcing Playbook, and the version live today, updated 15 June 2026, describes itself as the "fourth update", still built around the same eleven policies: pipelines, market health checks, project validation, delivery model assessments, should cost modelling, pilots, KPIs, risk allocation, pricing, supplier financial standing, and resolution planning [3]. It remains live guidance, checked on GOV.UK on 13 September 2026 with no withdrawal notice [4].
Six years after Lewis's endorsement, Capita is the company whose own government contract has become the Playbook's most visible live test. In November 2023 the Cabinet Office awarded Capita a seven-year, 239 million pound contract, extendable to ten years, to administer the Civil Service Pension Scheme, taking over from MyCSP, which had run it since 2012 [5]. The award came months after Capita disclosed a data breach in which bank details, addresses and passport photos belonging to staff and members of its schemes were reportedly put up for sale [5]. Capita is also one of the Cabinet Office's roster of Strategic Suppliers, each assigned a named Crown Representative inside the department for closer oversight, Capita's own listing last updated 1 July 2026 [6]. The scheme transferred to Capita on 1 December 2025.
The claims, tested
| The Playbook's claim | What we found | Verdict |
|---|---|---|
| "We are committed to providing accurate data... particularly with first generation contracts", and for later procurements "we rely on data provided by the incumbent" [3] | Capita's own chief executive told MPs "the sheer scale of the data that was missing upon transfer is huge. We're talking about 20 million records" [7] | The handover the chapter describes did not happen |
| Outsourcing is "more challenging" for services that "have experienced many operational difficulties in the past" or carry "disproportionate effort and cost to bring services back in-house in future" [3] | Cabinet Office's own 2021 Delivery Model Assessment found "outsourcing provided the best opportunity to realize defined benefits with the least risk" for exactly this scheme [8] | The Playbook's own checklist, waved through by the Playbook's own process |
| "In future, the financial thresholds we require suppliers to meet... will include some of the financial tests conducted on procurement" [3] | Identical wording, "in future", appears on page 65 of the original May 2021 edition [9] | Five years and four updates, still unfulfilled |
| KPIs "should be relevant and proportionate"; more than "10 to 15 per service" risks "overcomplicated contracts" [3] | Capita was "on track to fail 16 of its 21 headline KPIs" seven months after go-live, with the backlog "getting higher and higher" [7] | Twenty-one is already over the Playbook's own ceiling |
| Ongoing monitoring should use "alert systems... to monitor company announcements and other information sources", independent of day-to-day contract management [3] | The NAO found Cabinet Office "largely reliant on self-reported data from MyCSP" for oversight of the predecessor contract [10] | The independent check the chapter describes was not the practice |
| Benefits realised through the contract should have milestones "to align with the intended benefits" [3] | The NAO found Cabinet Office's claimed 83 million pound saving had "no fixed innovation or digitalisation milestones for Capita to deliver against" [10] | A headline number nobody can check |
Twenty million records, and a chapter about exactly that
Chapter 5 of the Sourcing Playbook, "Preparing to go to market", has a section called "Quality data and asset registers". It states plainly: "Suppliers are dependent on us having good data. The only way they can assess whether the delivery model and pricing structure that we take to market is deliverable and sustainable is if it is based on quality data." For a second or subsequent procurement, it continues, "we rely on data provided by the incumbent", and "good contract management throughout the life of the contract is essential to ensure that the incumbent consistently provides and updates this information" [3].
The Civil Service Pension Scheme was exactly this kind of procurement. MyCSP had run it since 2012, meaning thirteen years of records to hand over cleanly. Capita initially expected to inherit around 37,300 cases; by July 2025, months before go-live, the Cabinet Office was instructing Capita to prepare for volumes of up to 100,000 [8]. By April 2026 the actual backlog stood at 86,000 cases, a significant proportion already overdue [8]. Richard Holroyd, chief executive of Capita Public Services, told the Public Accounts Committee that although the company had been warned about rising case numbers, "it had little understanding of their complexity or how long they had been outstanding" [8]. By July, Capita group chief executive Adolfo Hernandez put a number on the underlying problem: cases up to four years old, some relating to government departments that no longer exist, and "the sheer scale of the data that was missing upon transfer is huge. We're talking about 20 million records" [7].
The Playbook does not say quality data is desirable. It says the incumbent, MyCSP, and the department's own contract management were responsible for making sure it existed. Twenty million missing records is not a supplier failing to read the handbook. It is the handbook's own precondition for a safe transition not being met, on the one document that wrote the precondition down.
The risk checklist the department's own assessment waved through
Chapter 3, "Delivery model assessments", tells departments that some services are harder to justify outsourcing than others. It lists them: services that "are core to your organisation's purpose and objectives", that "have experienced many operational difficulties in the past", that are "poorly understood and/or not well defined", or where "there will be disproportionate effort and cost to bring services back in-house in future" [3]. A defined-benefit pension scheme for 1.7 million people, with 189 billion pounds of future liability [10], administered by an incumbent whose call centre had missed its answer-time target for at least two years running [10], is a reasonable match for at least three of those descriptions.
Cabinet Office ran the process the Playbook requires. Catherine Little, the Cabinet Office's permanent secretary, told the Public Administration and Constitutional Affairs Committee that the 2021 decision to outsource followed an "Outline Business Case" and a "Delivery Model Assessment" weighing insourcing against outsourcing. "The assessment provided a data-driven indication that outsourcing provided the best opportunity to realize defined benefits with the least risk," she wrote [8]. The competition launched in February 2022; two independent teams ran a technical and a commercial evaluation; Capita passed a past-performance check at pre-selection and won on price and value for money [8]. Every visible step matches the chapter.
What the chapter does not do is explain how "least risk" survived contact with its own checklist two paragraphs earlier. The process was followed. The conclusion it produced has not held up.
A promise still written in the future tense
Chapter 11's "Compliance confirmation" section reads: "In future, the financial thresholds we require suppliers to meet during the lifetime of new critical contracts will include some of the financial tests conducted on procurement. We will also require the boards of suppliers of new critical contracts to confirm annually that they continue to meet these thresholds" [3]. That sentence is not new. It appears, word for word, on page 65 of the original Sourcing Playbook, published in May 2021 [9]. Five years and, by the document's own count, four further updates later, including the one that covers the Capita transition described in this piece, the promised mechanism is still described as something that will happen, not something that does.
Monitoring built on the numbers the supplier hands over
The Playbook's "Ongoing financial monitoring" section is explicit about how it should work: monitoring should be run by "a function or team that is independent of the day-to-day contract management role", and "ongoing 'alert' systems should be established to monitor company announcements and other information sources" [3]. The National Audit Office's investigation into the predecessor contract found something narrower in practice: Cabinet Office "has an established governance structure... although it is largely reliant on self-reported data from MyCSP for its oversight of the Scheme's performance" [10].
The same report shows what that reliance cost. MyCSP's contact centre missed its 80 per cent, 30-second call-answer target for at least two years, at one point averaging 24 minutes to answer, yet this was "not a key service level" and "does not attract a financial penalty" [10]. Complaints rose 43 per cent between 2016-17 and 2024-25, to 4,780 [10]. Across that entire period, Cabinet Office applied precisely two financial penalties, 19,355 pounds in June 2022 and 228,538 pounds in 2024, and penalties of this kind can be waived by MyCSP itself citing "extenuating circumstances" [10]. The new Capita contract redesigns this: a five-point severity scale replaced the old met-or-not-met test, and call response was upgraded to a key service level that can attract a penalty [10]. That redesign is real progress. It is also an admission that the "independent" monitoring the Playbook describes was not what Cabinet Office was actually doing on the contract it is now citing as the reason to trust the process.
Sixteen of twenty-one, and getting worse
The Playbook's KPI chapter warns departments against setting too many: "having too many KPIs (i.e. more than 10 to 15 per service) will lead to overcomplicated contracts and ambiguity with suppliers" [3]. It also commits that "four KPIs from each of the government's most important contracts shall be made publicly available", in line with "the government's transparency agenda" [3]. The Capita contract carries 21 headline KPIs, already above the chapter's own ceiling before a single one is measured [7].
Speaking to a joint session of the Public Accounts Committee and the Public Administration and Constitutional Affairs Committee on 8 July 2026, seven months after go-live, Cat Little, chief operating officer of the Civil Service, said Capita was "on track to fail 16 of its 21 headline KPIs" that month. "They are not at the pace they need to move through the processing of the work, the backlog is just getting higher and higher, so my expectation is that this trend worsens and worsens, unless something radically shifts in their ability to tackle the most important, urgent, high-priority work" [7]. Little had already told the same committee in April that "Capita had provided inadequate management information to date," meaning the government's own picture of its "most important contracts" transparency commitment could not be verified even from the inside [8]. This was not confined to CSPS: across Capita's other 16 government contracts, 90 per cent of KPI data was rated "good" in the same quarter [8], which argues against "Capita is simply a bad supplier" and for a specific, document-shaped failure on this one.
Eighty-three million pounds, no way to check it
Cabinet Office's central financial argument for the switch is that the new contract saves money: 83 million pounds over its lifetime, through "innovation and automation", compared with the MyCSP contract it replaces [10]. The National Audit Office's June 2025 report, published five months before go-live, recorded that Cabinet Office "does not have agreed milestones against which to manage performance" for that figure, and that "with a plan yet to be provided, there are no fixed innovation or digitalisation milestones for Capita to deliver against" [10]. The same report notes Cabinet Office had previously hoped MyCSP would cut costs through digitalisation and made "limited progress", for the same reason: no contractual incentive to do so [10].
The Playbook's own logic is that KPIs "should be set to align with the intended benefits to be realised during contract delivery" [3]. An 83 million pound headline saving with no milestone attached to it is not a benefit that can be checked against delivery. It is a number in a business case, repeated in public, that nobody outside Cabinet Office and Capita has the means to audit while the contract runs.
Credit where due
The migration itself landed on schedule. A defined-benefit scheme covering 1.7 million people, with 189 billion pounds of liability and thirteen years of MyCSP records behind it, went live on 1 December 2025 as planned [5], which is a genuinely hard technical and data cutover to land on time even before anything else about it is judged. When it went wrong, the response was not silence: the government withheld 9.9 million pounds in transition payments, brought in an independent auditor to settle a dispute over further deductions, and put named officials in front of two select committees on the record within months rather than years [7]. Capita group chief executive Adolfo Hernandez apologised in the same hearing to members "who have been receiving a very poor service at a very difficult and challenging time in their lives" [7], rather than deflecting the question. And the National Audit Office's own June 2025 report flagged the unmeasurable savings claim five months before it became a live problem: the machinery the post-Carillion reforms built to surface exactly this kind of risk did its job. Nobody acted on the warning in time, but the warning was there, on the record, before go-live.
Verdict
Three stars, from six documented mistakes in a rulebook whose central chapters, on data quality, risk screening, financial monitoring and benefits tracking, are sound in principle and were tested in public within five years of this edition's currency, on the department's own contract, involving a supplier that helped write the rulebook's first edition. None of the six is a case of Capita or Cabinet Office breaking a rule. Every one is a case of the Playbook's own promise not surviving contact with a procurement its own department ran. The Playbook was built to survive a supplier going bankrupt. Capita never came close to bankruptcy. The pension scheme still broke.
The star score counts six documented mistakes against the Sourcing Playbook's own text: the "Quality data and asset registers" chapter's promise tested against 20 million missing records; the "Delivery model assessments" risk checklist tested against the 2021 assessment that still recommended outsourcing; the "Compliance confirmation" section's threshold promise, written "in future" and unchanged since the 2021 edition; the KPI chapter's stated ceiling of 10 to 15 indicators tested against a 21-KPI contract failing 16 of them; the "Ongoing financial monitoring" chapter's independent-alert-system promise tested against the NAO's finding of reliance on supplier self-reported data; and the KPI-to-benefits alignment principle tested against an 83 million pound savings claim with no agreed milestones. Six falls in the 4 to 9 band: three stars; the bands are on the ratings page. Capita's own marketing language on go-live, describing "the largest ever on time transition of a public sector pension scheme in the UK", is quoted for colour and not counted as a mistake against the Playbook, since the rating tracks the document's claims, not a supplier's press line. Analysis is of the Sourcing Playbook as served from GOV.UK on 13 September 2026, updated 15 June 2026. The document is tracked in the Daily Register; a revision will get a diff entry.
Sources
- National Audit Office, "Investigation into the government's handling of the collapse of Carillion", HC 1002, Session 2017-2019, 7 June 2018. https://www.nao.org.uk/reports/investigation-into-the-governments-handling-of-the-collapse-of-carillion/
- GOV.UK / Cabinet Office, "'Outsourcing Playbook' published", 20 February 2019. https://www.gov.uk/government/news/outsourcing-playbook-published
- HM Government / Cabinet Office, "The Sourcing Playbook" (HTML edition, updated 15 June 2026). https://www.gov.uk/government/publications/the-sourcing-and-consultancy-playbooks/the-sourcing-playbook-html
- GOV.UK, "The Sourcing Playbook" (publication page, checked live 13 September 2026, no withdrawal notice). https://www.gov.uk/government/publications/the-sourcing-and-consultancy-playbooks
- The Register, "New Capita-run civil service pension portal full of errors", 3 December 2025. https://www.theregister.com/2025/12/03/capita_civil_service_pension_portal/
- GOV.UK / Cabinet Office, "Crown Representatives and strategic suppliers" (last updated 1 July 2026). https://www.gov.uk/government/publications/crown-representatives-and-strategic-suppliers
- The Register, "UK.gov withholds £10M payment from Capita over pensions project fiasco, as dispute continues", 9 July 2026. https://www.theregister.com/public-sector/2026/07/09/ukgov-withholds-10m-payment-from-capita-over-pensions-project-fiasco-as-dispute-continues/5269227
- The Register, "Capita won troubled UK pensions gig after performance checks", 17 April 2026. https://www.theregister.com/2026/04/17/capita_csps/
- Cabinet Office, "The Sourcing Playbook" (PDF, first edition, May 2021, p.65). https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/987353/The_Sourcing_Playbook.pdf
- National Audit Office, "Investigation into the administration of the Civil Service Pension Scheme", HC 951, Session 2024-25, 16 June 2025. https://www.nao.org.uk/reports/investigation-into-the-administration-of-the-civil-service-pension-scheme/