§ Mr. Jim CunninghamTo ask the Deputy Prime Minister (1) what cost savings he expects to accrue from the contracting out of the principal civil service pension scheme; [12932]
(2) what representations he has received from members of the principal civil service pension scheme concerning the contracting out of the scheme; and what percentage of those representations have been in favour of the contracting out proposals; [12936]
(3) when the decision to contact out the principal civil service pension scheme was taken; [12934]
28W(4) what the level of investment in the administration of the principal civil service pension scheme has been since 1992; [12933]
(5) how many members there are in the principal civil service pension scheme; [12937]
(6) if he will make a statement on the conclusion of the efficiency scrutiny into the principal civil service pension scheme, published in December 1992, with particular reference to administration of the scheme; [12931]
(7) what discussions his Department has had with the current administrators of the principal civil service pension scheme with respect to the contracting-out of the principal civil service pension scheme. [12935]
§ Mr. WillettsThe efficiency scrutiny of administration of the principal civil service pension scheme identified the administration function as suitable for market testing and recommended that departments should be encouraged to pursue this. All the recommendations of the scrutiny were accepted, including those directed at raising standards of service quality and delivery to scheme members. New pensions administration software is being developed at a cost of some £1.2 million. This will facilitate the market testing process and make it particularly effective. Employing departments have been fully involved in the development of the new software, as they have with other aspects of implementation of the efficiency scrutiny recommendations.
There are some 520,000 active members of the PCSPS. Some 544,000 former civil servants or their dependants are in receipt of a pension, and there are approximately 240,000 former civil servants with pension benefits preserved for payment at pension age.
It is not possible to specify in advance the savings which result from subjecting particular activities to competition, but I have no reason to doubt that market testing PCSPS administration will identify cost savings consistent with the average saving of 21 per cent. that has resulted from the £2.6 billion worth of activities reviewed under the competing for quality programme in the three years to March 1995.
My predecessor, my hon. Friend the Member for Orpington (Mr. Horam), announced in a written answer on 17 October 1995, Official Report, columns 184–85, that an order under the Deregulation and Contracting Out Act 1994 opening up administration of the PCSPS to the private sector would be laid in this Session of Parliament. Various representations that had been made were taken fully into account in the decision to open up to competition the administration of the PCSPS. The Council of Civil Service Unions and the Civil Service Pensioners' Alliance have been formally consulted. I can assure scheme members that occupational pension arrangements for civil servants will continue to be provided through the PCSPS and that the scheme will continue to be managed and controlled by the Office of Public Service. It is scheme administration that is to be market tested.