Cabinet Office Clarifies 2021 Outsourcing Amid 2025 Contract Implications

The Cabinet Office has clarified its reasons for choosing outsourcing in 2021. Filmogaz.com reports this update amid growing scrutiny and 2025 contract implications.

Permanent secretary Cat Little set out the explanation in a letter published for MPs. The letter followed questioning at a Public Administration and Constitutional Affairs Committee session.

How the decision was reached

The 2021 choice formed part of an Outline Business Case. Officials carried out a Delivery Model Assessment aligned to the Sourcing Playbook.

The assessment compared cost, risk and benefits. It included analysis of insourcing options as well as outsourcing.

Procurement process and award

The annex to Little’s letter says procurement happened under the Public Contracts Regulations 2015. Detailed requirements aimed to improve on the previous contract.

Bidders were screened for past performance at pre-selection. Capita passed that stage and won the contract at tender.

Two independent teams performed technical and commercial evaluations. The Cabinet Office says the award followed the stated methodology.

Performance since transition

The transition to Capita began in December after the November 2023 award. Performance since then has drawn sustained scrutiny.

Capita’s record across 16 government contracts shows varied results. In Q2 of 2025-26, 90% of KPI data was rated Good and 5% rated Inadequate.

• The inadequate ratings relate to the Recruitment Partnering Programme.
• They also relate to the Teacher’s Pensions Scheme.

The Civil Service Pension Scheme contract contains 21 KPIs subject to service credits. The Cabinet Office reports Capita has failed the majority of those KPIs.

Officials say management information from Capita has been inadequate to date. That has complicated oversight and dispute resolution.

Milestones and payments

The transition was divided into 11 milestones and a final Contract Performance Point. Seven milestones were achieved and paid in full.

One milestone was partially met and part-paid. Three milestones remain unpaid. The final CPP payment will be withheld until standards are met.

Member impact and wider questions

The Cabinet Office provided member-level figures. As of 10 March, 646 loans had been paid, totalling £3.5m.

Those payments show administration continues despite governance concerns. They also underline the material consequences for members.

The department now defends both the 2021 outsourcing choice and its use of milestone withholding and KPI scrutiny. Officials argue the procurement sought to minimise risk.

But the current delivery record raises fresh questions. MPs and officials will assess whether the original framework still matches operational reality.