Tax Credits: Concentrix

Baroness Hollis of Heigham Excerpts

Wednesday 14th September 2016 Lords Chamber

[Lord Young of Cookham]

As for HMRC, this is the only enforcement function that has been contracted out. There are other contracted-out arrangements—for example, for IT—but this is the only enforcement contract that has been outsourced and, as I said, it will not be outsourced when the contract expires next May.

[Baroness Hollis of Heigham (Lab)]

My Lords, I, like others, am delighted that we are bringing a lot of this back in-house—quite rightly so. We have had the history of G4S, Atos and now Concentrix. First, HMRC must introduce the system that applies to other benefits used by DWP, which is that before a decision to cut benefits is implemented, it is reviewed by a mandatory decision-maker—a more senior officer within the Civil Service—to ensure that no basic errors have been made. Secondly, the main reason why errors occur—errors far outpace fraud—is because there are so many changes of circumstances. Half of lone parents have 12 changes of circumstances a year; the computer never catches up. UC is intended to overcome this—and I hope it will—by using real-time information. Will real-time information be built into tax credits, because, given the recent security review of UC, it looks as though migration may now not be complete until 2022?

[Lord Young of Cookham]

The noble Baroness speaks on the subject with great experience, having had ministerial responsibility for this. I will take back the suggestions that she has made about the action that needs to be taken before we move to the enforcement regime. As I said, the system of universal credits has a different approach with every person having a personal adviser right at the beginning, which of course is not the case with tax credits. I think that I am right in saying that Atos had its contract before the 2010 Government came to power but I take on board what she said about the need to be sensitive. I understand that we are moving over to a real-time information basis which should help those on tax credits. HMRC will have up-to-date information from the employer in real time rather than waiting for the claimant to notify it five or six months later that their circumstances have improved, and then, perhaps even later than that, getting a letter saying that they now owe huge sums of money. It is very important that any new regime should avoid that problem.