Tax Credits: Concentrix

Baroness Kramer Excerpts

Wednesday 14th September 2016 Lords Chamber

[Lord Young of Cookham]

I am grateful to the noble Lord for his comments. I begin by apologising to all those who have been distressed by an unacceptable level of service, to which the noble Lord referred. I know from my experience in another place how distressing it can be if families who are, by definition, on low incomes, suddenly find that a flow of income is stopped. Referring to the action now being taken, a priority is to deal with those cases where payments have been stopped. As I said, HMRC has now seconded another 150 staff to tackle the backlog of cases, to see whether we can get them up to date. As for the future, the contract will not be retendered. At the moment, the bulk of the work is being done by HMRC and, as from next May, it will do all the work. Looking ahead, over the next six or seven years, those on tax credits will move over to universal credit, and that system will incorporate the lessons we have learned running the procedures under tax credits.

[Baroness Kramer (LD)]

My Lords, I listened to the discussion of this Urgent Question in the other place and it is evident that, month after month, Members from across the House have been bringing their complaints not just to Concentrix but to HMRC and Ministers and have essentially been ignored until the BBC got involved in the process. Does the Minister agree that this is a good indication that for tax credits and other complex issues, we need a review of whether outsourcing is appropriate? I refer him to the comments of the right honourable Member for Chingford and Wood Green, who has asked Questions about this. Also, where contracts are outsourced, not only must there be proper training and resourcing for HMRC or the department supposedly managing it, it must understand that active, not passive management is necessary.

[Lord Young of Cookham]

I am grateful to the noble Baroness for her comment. As I said, this contract was outsourced in 2014, when there was a coalition, and I would not rule out all outsourcing by government departments as a matter of principle. As for this particular case, as I have just made clear, it will not be outsourced in future; the work will be taken in-house. As we develop the new process of migrating from tax credits to universal credit, we will learn the lessons that have become clear in this case.