Concentrix: Tax Credit Claimants

Chris Law Excerpts

Tuesday 18th October 2016 Westminster Hall

[Fiona Mactaggart]

The hon. Gentleman is right. Civil servants are trained to conform with the law. How can Ministers ensure, in this contract or in any future contracts, that there is not a parallel reinterpretation of the law by a private company? When the Minister was informed about the Wikeley judgment, as I hope he was, what did he do to ensure that all future decisions would conform to the law? Civil servants are generally trained in a culture where the law is the guide to how they work; I am concerned that Concentrix staff were not operating within such a culture. There is a real risk of letting out similar contracts in future that do not operate within such a culture.

[Chris Law (Dundee West) (SNP)]

Does the right hon. Lady agree that the problem is not just with this contract but with all results-based contracts in which there is essentially a commission? Atos was under a similar contract and we all know the terrible damage it did to sick and disabled people. Although it is welcome that we are ending the Concentrix contract in May 2017, the UK Government now need to stop all such contracts and fundamentally review the entire process.

[Fiona Mactaggart]

The hon. Gentleman is right that we should stop such contracts, but we also need to find out the extent to which there has been a failure of policy underlying the Concentrix contract. I agree that the very nature of the contract—having a private company asking for those details—was inappropriate. So was the payment-by-results aspect, for example, and the fact that when the company was under pressure there was no way of bringing in civil servants to help by answering the telephone and so on. Such problems are inherent in that kind of contract, but some of the difficulties must have been created by the way the Treasury and HMRC operated. They provided the company with totally flimsy evidence and suggested it should be investigated. In effect, they ran a campaign against parents who were doing the terribly difficult job of bringing children up on their own. We should be ashamed of ourselves for targeting that group of people, who are resilient but in some ways vulnerable. The job of broader society is to help them in their task of bringing up the next generation.

Many claimants received a letter requiring council tax records, a year’s worth of bank statements, pay slips, childcare costs, divorce papers and household bills. Many people, as I would have done, treated such requests from a private company as probably a phishing exercise by a fraudster. Those people discovered within 30 days that their conclusion was an expensive mistake: their tax credits were stopped. All my constituents who had their tax credits stopped eventually had them restored.

I stress that it happened eventually. It was often after hours on the telephone and the intervention of my staff. Those hours on mobile phones cost an enormous amount for some of these people, who at the time had no money to speak of apart from the meagre wages they earned from their part-time jobs.

--- Later in debate ---

[Chris Law (Dundee West) (SNP)]

Mr Nuttall, it is a pleasure to serve under your chairmanship.

Over the last few months, I have heard innumerable distressing accounts from people living in my constituency of Dundee about how the failures of this US multinational contractor are driving families immediately into poverty, driving them to food banks, driving them—in some cases—into losing their homes, and driving individuals from my constituency to make calls saying they feel suicidal because they feel they have nothing left to live for.

Unsurprisingly, this is not the first time that Government outsourcing has failed to meet expectations. In the past, we have seen that results-based contracts do not improve the quality of public services. I am sure that everyone in Westminster Hall today remembers Atos, whose shambolic and cruel tests were designed to strip away benefits from sick and disabled people. Under its contract, Concentrix is paid on a payment-by-results model when tax credit claims are cut; in other words, the more tax credit payments Concentrix puts a stop to, the more commission it pockets.

In July, the Social Security Advisory Committee recommended that

“appropriate safeguards are needed to preserve justice for the claimant.”

So far, and as my constituents’ cases prove, that is clearly not being achieved. To add to that, Her Majesty’s Revenue and Customs is continuing to cut jobs right across the UK, while at the same time privatising and outsourcing contracts. HMRC departments that are already understaffed have been left to pick up the pieces; they have spent months dealing with backlogs of claims and errors.

The contract with Concentrix has not been renewed, which is a step in the right direction. However, this Government need to go further. They should not only put an end to the Concentrix contract immediately but call time on awarding any public contracts on a payment-by-results basis. We all need to remember that those of us who have the privilege to be Members of this House are here to serve the public. In that spirit, we need to ensure that organisations that are allowed to act on our behalf demonstrate a similar commitment to service, dignity and respect, rather than to profit. Payment-by-results contracts should have no place in the delivery of such important services—

[Mr David Nuttall (in the Chair)]

Order. I call Mike Wood.