Government enters a pensions minefield : COMMENT
Thursday 16 February 1995
If this were to go wrong in the handover stages, the public relations disaster would make Group 4's teething troubles with prisoner security look like a non-event. Imagine the political impact of thousands of elderly pensioners complaining about being robbed through mistaken or late payments.
Not that the job is particularly challenging, since this kind of work is the clerical equivalent of a factory production line and the money ultimately comes from government. It seems implausible that there is not room for efficiency gains by contracting out. If the consultants advising the Government are to be believed, there could be savings of 20-25 per cent on the £150m a year or so it costs to administer the various public sector schemes.
But like any new piece of equipment, there are bound to be difficulties as private companies start up their new streamlined computer plants to take over processing from the state agencies that now conduct the work. It is fair to say that of all the many good things that the City has contributed to the nation's welfare, efficient back-office systems are not the first thing that springs to mind.
It is not perhaps a coincidence that the teachers'additional voluntary contribution scheme, which is already administered outside the civil service by the mighty Prudential, has generated a rash of complaints to the newspapers. Significantly, they are mainly about administrative matters.
As pensions intrude directly into the lives of very large numbers of people, their reaction to even quite minor mistakes can be extraordinarily fierce. The teachers' pension scheme alone has 750,000 existing members and 350,000 already retired. It is a safe assumption that a good proportion have no great admiration for the concept of privatisation. They will surely seize on any perceived lapse in administration with zeal.
This makes the case for the Government to proceed with extreme care. It seems reasonable for there to be pilot projects to test administration systems rather than the wholesale switch in the shortest possible time that the Government appears to intend.
There should also be safeguards, including a high level of security for the databanks, a complete ban on the sale of junk mailing lists based on them and stringent requirements for high minimum standards of service.
But as with any factory, it is possible to measure throughput and productivity and check value for money. It should be easy to demonstrate substantial savings from privatisation at the cost of relatively few civil service jobs.
The political row over this change is misdirected, like so many to do with contracting out. In fact, there is a good case for going further, by bringing in fund management expertise and switching to a fully funded basis, just like ordinary private sector pensions.
- 1 Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
- 2 Margaret Thatcher 'expressed fears of Asian rising' at Anglo-Irish summit in 1984
- 3 Sussex couple die in suspected Christmas Day 'suicide pact'
- 4 The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
- 5 The Unluckiest People of the Year 2014 (and one very unlucky giraffe)
Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
UK weather: Warning for more snow and ice as freezing temperatures and gales hit Britain
UK weather: Travel chaos continues as King's Cross train delays add to snow on roads
The Unluckiest People of the Year 2014 (and one very unlucky giraffe)
North Korea calls Barack Obama 'a monkey' in latest attack as 'The Interview' row festers
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
Immigrants make UK racist, says Ukip councillor Trevor Shonk
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Katie Hopkins speaks out on childhood obesity: 'Parents of fat children should be prosecuted for child cruelty'
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...