Civil Service Pension Debacle and Cheaper Energy?

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गगगगग बाले लगगग

Wherever you get your own.

Hello, welcome to this Money Box Podcast. One in eight parents says no to a tax free fourteen hundred pounds a year as take up of child benefit plummets to its lowest level this century. There are calls for a new energy tariff to cut the fuel bills of people on lower incomes. And find out how to give it a hundred and ten percent and score a twenty to celebrate the end of the twenty eight year drought as Scotland qualifies for the men's football world cup.

The anger is the anger I struggle to deal with. And and I just feel like I've been lied to.

It's six months since Capita took over the job of administering the civil service pension scheme, but thousands of people who deal with benefits, tax, border security, and all the key things the state does for us are still waiting for their pension payments that haven't arrived and

But that quickly expanded to 120,000 cases, covering everything from simple pension calculation queries to urgent questions about missing lump sum payments. The problems were so bad that the government stepped in, with senior Capita executives called in front of the Public Accounts Committee multiple times. We've now had three public apologies from Capita for the handling of the situation.

Every time I've tried to get through to them in the past, it can take up to three hours to get through to a helpline. The complaint took eight months for them to resolve, not twenty working days. And it took writing to the chief executive of Capita to get any at all, I genuinely think I'm gonna have to look for another job.

Well, as you say, Hannah, the end of June deadline to get things back to normal is not long away. How long how likely will it is that that it will happen on time?

Well Paul Capita recently reported that it is making progress on getting things back to normal levels and in a statement to Moneybox it apologised again and said that additional trained staff remain in place and its focus is on ensuring members receive the service that they deserve.

We've got no confidence actually that capital will meet the government target and we've already said to the Cabinet Office that they should be preparing for an in house team to take over that contract because it's quite clear, based on all of our experience to date, that they're not gonna have this sorted by by July. There is already a ta a cost of the taxpayer and we think there will be a continued one. So

Well, the Cabinet Office said capita's management of the contract was unacceptable, and that they will use all available commercial levers to hold capita to account.

Thanks Hannah. Well that question about how Capita was awarded the contract is a good one. I have to say one being asked among the Money Box team as well as by many of our listeners. Live now to an airport in Europe to speak to Pedro Tellis. He's associate professor in law and specialises in public procurement for companies across the UK and Europe. Um, Pedro, tell us how does the process work for awarding these big and important contracts? Is it just accepting the cheapest credible offer?

Hi Paul, thank you for having me. Um what it happens is that historically public procurement is designed for the contract to be awarded to the best bid that has been received and not necessarily to the best bidder. So those two things are treated separately. because uh the idea is that you want the the pro the the process not to be discriminatory based on the identity of the bidder.

So when it comes down to it, down to the decision itself, the people making that don't know about this long history, or at least not officially.

Uh that is correct. That should be treated separately. So the history should be assessed earlier on in the procedure. And Again, it's very difficult to do that in a way that is not not non discriminatory. Um

But i is there real competition? I mean are there many other companies who could manage a big contract like this?

That is the next problem, which is if you start trying to exclude and ban these companies from the from the market, that's gonna reduce even further the limited competition that you have in that uh at that top end of the market. So for example, you know, Karelian nine years ago went Uh went bankrupt, went uh went under, and that reduced significantly the competition that Capita and others were were facing in that market.

Well competition doesn't really seem to be working very well, does it? And I must say though, I do get complaints about many of the firms administering pensions, so perhaps there isn't that great a choice. And and as Hannah said to us, the Cabinet Office told us it would use all available commercial levers to hold capita to account. So it's got the contract because of the reasons perhaps you explained. Could holding it to account include sacking it, getting rid of it?

It is possible. It is possible. Um so uh that follows traditional uh contract law. So if there's grounds to terminate the contract or grounds to to obtain damages, uh then certainly uh the the government can uh can pursue that avenue.

Yes, and it has done that, hasn't it? I mean in April I think Capita was stripped of its job managing the Royal Mail pension scheme. So it has happened and certainly um other other pension providers have been moved. But I mean Capita in fact took over from another one, but things got worse rather than better.

Yeah, regarding the Royal Mail Royal Mail contract, uh Capita is still this week claiming that negotiations are ongoing. So I'm not sure exactly what is the situation there if if Capita has been taken out of that contract.

But they are trying trying to do that anyway. Um and what about taking it back into the civil service in house as the PCS union seems to want? Would that work?

What tends to happen once you start an outsourcing uh process of going to the market and uh get external contractors to do this kind of work for you. you're gonna lose the capacity to do it in house quite quickly, even the capacity to manage the contracts, which is usually the reason why these contracts tend tend to to fail.

Yes, and we've also had an email from Allison who said removing the contract from Kapite, whatever happens to it. Doesn't help those of us currently caught up in this difficult situation, the thousands of people, as we heard,'cause that whatever it whatever change you make, i it would be a long process, wouldn't it, briefly?

The process could be done reasonably quickly if the contract is terminated. But um uh the the the actual improvement in the service and improvement in the delivery might take might take longer, uh especially because then you have the reputational risk on the public sector side.

Teodotelus, profilment professor, thanks very much for talking to us.

Thank you.

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One in eight parents do not claim child benefit, even though it's worth at least fourteen hundred pounds a year tax free, more of course, if you have more than one child. One in eight, thirteen percent not claiming is the highest it's been since records began in two thousand and three. At one time practically every parent claimed. But HMRC, which published these latest figures recently, also revealed that one in three new parents are not claiming child benefit in their baby's first year.

Tell me about this little one on your knee.

He's eight weeks old, coming for his vaccinations today.

Are you claiming child benefit for him?

No, I wasn't aware.

Rydyn ni'n cael ei wneud unrhyw unrhyw unrhyw unrhyw unrhyw unrhyw unrhyw unrhyw unrhyw unrhyw?

Yes, yeah, of course. Groceries, snappies.

Ha ha ha.

Anything for him?

Have you read anything about child benefit for new babies?

No. They inform us of a lot of things, but I've not been involved of that yet.

And tell me what about your little one?

Uh he's twelve weeks old and we're here for his next set of vaccinations. No, I didn't think I was eligible for any child benefit based on my salary.

So you're the nan, aren't you? Yes.

Yes I am.

Yeah. And do you know if your daughter is claim child benefit?

Rydyn ni'n gwneud. Rydyn ni'n gwneud hwnnw hwnnw hwnnw. Rydyn ni'n gwneud hynny. Rydyn ni'n gwneud hynny. Rydyn ni'n gwneud hyn.

So do you claim child benefit? Yes.

Before the baby broom we already know because some of my colleagues told us you must to clam list quite good because you can get some money back and also you can put some money for your future child care.

And tell me what else you use the money for?

for some snacks and bottle the milk formula.

Well listening to that is Devon Galani, Chief Executive of Policy In Practice, that's a social data analysing firm which helps people and authorities navigate the benefit system. Something we all need, I think, Devon. Uh Devon Gillardy, some mothers they're claiming, some choosing not to claim, and some who didn't know about it even. Does that surprise you?

It does surprise me. Um uh child benefit used to be the poster child of of how to get high levels of take up. So before twenty thirteen it was universal. Any parent who had a child would when they registered their child a couple of days later fill in the form and begin to get child benefit.

Yes, I mean that the high income child benefit charge or tax as I sometimes call it, is a clawback. It as you say, it began in twenty thirteen and it started at fifty thousand a year then, didn't it, till very recently. Do you think e even the fact there is that kind of rule puts people off claiming? And that woman we heard in Liverpool said, not worth claiming on my salary. We don't know if she was right or not.

I think it does. It makes it certainly makes parents think. Um and it makes parents think firstly about whether or not they should claim. So maybe their earnings fluctuate, particularly if you're if you just had a child, right? You might change your hours. You might go to four days a week, three days a week.

Yes, and as that lady in Liverpool's the other lady told us, it it makes a big difference. I mean it's fourteen hundred pounds a year and Babies are not cheap things to have, are they? Are they? But there are more benefits than just the money, aren't there? Because you you get other things associated with having a live claim.

Yeah, so the national insurance um uh I was I was talking to a colleague of mine's had a baby recently and uh congratulations to her. Um but yeah, her her reason for claiming were the national insurance credit. Um so that means that yeah, you're you're building up your national insurance um at the same time.

Well, principally the state pension I think, but only if your child's under twelve, I think, isn't it?

Yeah, so all of these extra bits add up to sorry, the national insurance adds up to your state pension, adds up to um being able to claim if you lost your job as well, um, soon after, um, then uh it means you can claim um Yeah, you can access support through the benefit system through that as well.

It also means your child does get a n a national insurance number automatically at sixteen, which helps them work sometimes which we've discussed before. Um now those mothers who hadn't heard of it. Um I I thought people were told almost with the birth certificate, certainly very very soon. Has that has that been changed?

I remember um being told when we registered our child and also kind of in the maternity ward. So I think it must vary from place to place. Um but I I really think it's the w when you've just had a baby you're thinking about lots of different things.

Sorry to interrupt it. It can't be backdated more than three months, so it's important to get that claim in early, isn't it?

Yes, um absolutely. And I think, you know, we saw in HMRC's press release as well that um you're seeing A lot more parents, particularly in that first germ, missing out. So uh yeah, they do need to be told and and and you do need to claim as early as possible.

Seven Gillani thanks. And HMRC has told us that it is easier to pay the high income charge now, and also it promotes information in hospitals across the UK.

Absolutely crazy the the worry of energy costs. Just after twenty twenty, 120 pounds was my energy cost. Plus then I had my ex partner and his two children living with us, and that was our energy costs for a month now. I'm paying the minimum payment that they'll accept is£120. My usage is a lot more than that. And I'm really careful about leaving lights on, charging phones, using the washing machine. Um I don't have a tumble dryer or a dishwasher for these reasons. It's just eats up your money.

Well listening to that is Tom Gibbons, a manager and advisor at the Free Debt Advice Provider Money Wellness. Tom Gibbons' energy price is going up on july the first. Cayley is one of your clients, I understand. Many people are there many people like her struggling to afford energy bills?

Uh yes, there's a lot of people who are now struggling uh with the price cap going up. Uh the concern is that although the prices came down slightly earlier this year, millions of households have never really recovered. From the debts built up from the energy crisis. So another increase now, especially heading towards the autumn, is going to put huge pressure on already stretched budgets. I think the statistics we're looking at is over the last three years, debt

Yes, and we've reported on this programme before that Energy UK, which represents all the suppliers, uh told us in fact told us this week energy total energy debt was five point five billion pounds, which is an extraordinary sum. And what can you do about these debts? Because I mean Kayleigh told us that it used to be one hundred and twenty a month, and she's still paying that, but it's not enough to pay for her energy. That can't go on forever, can it, not paying enough?

No, that's right. And you know, the most important thing I think first of all is make sure you're on the cheapest tariff available. You know, you can look at switching your energy providers. Um failing that, what I would r strongly urge people to do is make contact with a free debt advice provider such as Money Wellness for for further guidance and and support with the debt.

Yes. And and you've called, in fact, for something extra, a a social tariff, lower bills, perhaps for people like Kayleigh. How would that work?

Yeah, so a social tariff would create a consistent national safety net really for people who simply can't afford essential energy. Uh we already see this sort of thing with the water providers where a social tariff can help low income households

Yes, but somebody would have to pay for it, wouldn't they? I mean the Department of Energy says it's already taken a hundred and fifty pounds off the average bill, extended the warm home discount to six million families. Of course that helps people on low incomes, but The rest of us do pay it in higher prices, don't we? So somebody would have to pay.

Yeah, absolutely. And there's gonna be different models but ultimately it's about recognising energy as an essential service. Now there could be a combination of government support and also supplier involvement as well. similar to the existing affordability schemes. But the wider point is that preventing debt is usually cheaper than dealing with the consequences later, whether that's enforcement costs, bad debt or or pressure on the health services as well.

Yes. Um Energy UK, which represents suppliers, told us uh that that they know their customers better than anyone and they tailor help to different needs. But Energy UK recently told us, as I said, debt was five and a half billion. Um would social tariffs bring that debt down, do you think, in the long run? It it won't address past debts, will it, just briefly?

No, it won't exactly. But a lot of people are still dealing with arrears that they've accrued, for example, during COVID. So I think having lower tariffs for people most in need. would at least enable them to start focusing on the arrears that they've built up and hopefully start bringing those balances down while still maintaining their um their ongoing monthly usage.

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Thank you. Thank you.

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He's widely recognized as one of the greatest footballers in history.

He's won the prestigious Ballon d'Or award five times.

He's the all-time leading goal scorer in professional football.

index, he's the first active footballer in history to achieve billionaire status.

Guess who we're talking about yet?

That's right. of football icon Cristiano Ronaldo.

That's our best.

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