Government enters a pensions minefield : COMMENT

The Government is being rather daring in deciding to privatise the administration of the pensions of civil servants, teachers and other public service employees.

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.

Start your day with The Independent, sign up for daily news emails
News
election 2015The 10 best quotes of the campaign
News
A caravan being used as a polling station in Ford near Salisbury, during the 2010 election
election 2015The Independent's guide to get you through polling day
News
people
Voices
David Blunkett joins the Labour candidate for Redcar Anna Turley on a campaigning visit last month
voicesWhat I learnt from my years in government, by the former Home Secretary David Blunkett
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

Pan Am Experience: A 'flight' back to the 70s

Tim Walker checks in and checks out a four-hour journey with a difference
Humans aren't alone in indulging in politics - it's everywhere in the animal world

Humans aren't alone in indulging in politics

Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

Crisp sales are in decline

As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
Barcelona 3 Bayern Munich 0 player ratings: Lionel Messi scores twice - but does he score highest in our ratings?

Barcelona vs Bayern Munich player ratings

Lionel Messi scores twice - but does he score highest in our ratings?
Martin Guptill: Explosive New Zealand batsman who sets the range for Kiwis' big guns

Explosive batsman who sets the range for Kiwis' big guns

Martin Guptill has smashed early runs for Derbyshire and tells Richard Edwards to expect more from the 'freakish' Brendon McCullum and his buoyant team during their tour of England
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'