Is the state pension about to be privatised?


The DWP could be about to privatise delivery of the state pension, according to a leaked report. Many may have missed this revelation because of today’s other, more high-profile events.

According to The Guardian, the Department for Work and Pensions is struggling to meet the demand for savings being placed on it by the government; the plan is to slash its operational spending from £9 billion per year in 2009 to £6.3 billion by 2016. This means a £1 billion cut in the 2014-15 financial year.

A leaked report entitled DWP Efficiency Review claims one way of doing this would involve “a review of the pension service’s current delivery model and alternative delivery models” – in other words, privatisation.

The money would still come from the taxpayer but a private company would deliver it to pensioners.

What could possibly go wrong with that idea? After all, involving private companies in public services has worked so well in the past, hasn’t it? Look at G4S with the Olympics, Atos with sickness and disability benefits, any of the many companies involved with the useless Work Programme, or indeed any of the companies currently raiding the English NHS for profit.

(Please be aware that the immediately preceding paragraph was loaded with so much sarcasm, it may now be dripping from your screen. Apologies if this is the case but Vox Political will not be held responsible for the damage. Contact Parliament’s IT service – which happens to be another example of what happens when you get private companies involved in taxpayer-funded services.)

The review will question whether the recently-launched ‘Tell Us Once’ bereavement service, that helps people report deaths in a way that ensures all necessary government departments are made aware, could be more efficient if outsourced. This will be a waste of time as the answer is, quite clearly, no.

Pensions expert Ros Altmann was quoted as saying she was concerned by the idea that firms like Capita, Serco or G4S could be brought in to administer £100bn in public money to millions of pensioners: “We’re dealing with a vulnerable group and a massive number of people, so I would be seriously concerned about outsourcing a service like this, which is working well, with a view that it might make some short-term savings.”

The trouble is, the DWP has to make a saving somewhere, and all the easy efficiencies have already been made, according to the leaked report.

Too crude an approach to future cuts could jeopardise the department’s capacity to roll out changes to pensions, child maintenance and disability benefits.

It is significant that Iain Duncan Smith’s flagship Universal Credit, which is dogged by delays and IT problems, is not part of the review.

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7 thoughts on “Is the state pension about to be privatised?

  1. PendanticGeek

    Here’s an idea: administer a universal basic income to all adults through the HMRC then make a 100% efficiency saving on the whole DWP.

  2. joanna

    Mike what actually could happen if pensions were all privatised, I realise something bad, privatisation is one the worst words and concepts ever known. I don’t really understand and the more I know the better!
    Thank you!!

  3. MrChekaMan

    With the sole possible exception of the phone service, privatisation of state industries never works because a few large companies get everything and then there is nowhere to go for their customers when things go wrong. And knowing their customers can’t go anywhere they then treat them badly. It seems the Conservatives can’t even treat their own voters well.

  4. beastrabban

    Reblogged this on Beastrabban’s Weblog and commented:
    This is truly alarming. The privatised and semi-privatised sectors of the civil service have a history of expensive failure, almost from the very beginning when Maggie Thatcher’s and John Major’s administrations first started putting them out to tender for the private sector. Regular government contractors like G4S, Serco, C(r)apita and the rest regular complete tasks well over budget and over time. Quite often the PFI projects in which they’ve been involved have only been completed through a fresh injection of government funding. When this started, at first with contracts for IT services by various councils and other government departments, Private Eye carried one story after another of yet another dismal failure, each one rewarded with yet another contract to the company responsible, assisted by local councillors, civil servants and ministers sitting on the boards of those companies, or joining them soon after. And I can remember being very unimpressed when Major’s government privatised the collection department of the Inland Revenue. And yes, Barclays were very enthusiastic about doing that. With the firms mentioned above responsible for the delivery of essential benefits, you can expect them to come late, miscalculated, or absent, due to yet another administrative failure, or be billed for excess payments you’ve never had. You may even – God help you – find yourself in the awkward position of receiving someone’s benefit by mistake. As for the government’s position that this will all be done much more cheaply than the state can do it, this is another lie from a government that can’t find the truth with both hands. What will happen is that G4S, Serco, Atos, sorry, OH Assist or whatever lot of corporate cowboys with a complete lack of morals and expertise that would put Del Boy from Only Fools and Horses to shame, will put in deliberately low bids. Once they have won the contract, the expense will inflate massively, as, er, new problems were found that require sorting out, um, which weren’t foreseen in the original estimate, hum, ha, keep fingers crossed and hope the mugs get it. The actual work will be done, as usual, by underpaid, overworked drones treated with contempt and derision by the corporate suits, who will award themselves massive bonuses under the pretence of ‘performance related pay’. They will then justify these rises by saying that they were the reward for sorting out the company’s problems. Hum, ha, cross fingers and hope the mugs get it. They will then get another contract with the government, and will then issue more PR guff about efficiency, transparency, good business practice, and all the rest of it.

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