Pensions agency seeks bailout over IT problems

Scotland’s public sector pensions agency needs a five-year bailout from the Scottish Government following a botched IT scheme, a financial watchdog has found.

The Scottish Public Pensions Agency (SPPA) administers and pays the pensions for more than half a million members and pensioners in schemes belonging to the NHS, teachers, firefighters and police. After a £5.6 million IT project collapsed earlier this year, the agency has forecast a budget gap of almost £10m for the next five years and estimates £18m of government funding is needed for a replacement scheme.

The agency awarded the contract to set up an integrated administration and payment system to Capita Employee Solutions in 2015, but cancelled the deal in February – 11 months after it was due to be operational.

The Auditor General for Scotland, Caroline Gardner, examined the SPPA accounts for 2017-18 and found due to the failure of the IT project, forecast savings would not be realised.

A total of £1.6m in hardware and software for the project that will no longer be used has been written off. The Auditor General plans a more detailed report next year.