Concentrix

James Berry Excerpts

Wednesday 26th October 2016 Commons Chamber

[Jane Ellison]

I will take one more intervention. I have not taken one from—

[James Berry (Kingston and Surbiton) (Con)]

Will the Minister give way?

[Jane Ellison]

Well, I have not taken one from my hon. Friend, but I will take one from the Scottish National party and then I will progress to the end of my speech.

--- Later in debate ---

[Jane Ellison]

Far from saying that this is all Concentrix, I think there are lessons to be learned all round. I should signal now that, because I think there are lessons to be learned all round—for HMRC, for Ministers and certainly for Concentrix—the Government do not intend to divide the House on the Opposition’s motion. I want this to be an exercise in understanding the problems and learning the lessons. I will take one more intervention, for balance from my hon. Friend the Member for Kingston and Surbiton (James Berry), and then move on to the end of my speech.

[James Berry]

I have two Concentrix cases from single mothers, one of whom was required to disprove a relationship she plainly never had with a former tenant of her house, evidence she could not possibly provide. Does my hon. Friend agree that what is important now is that the Concentrix contract has been ended and a system for investigating mistakes and a hardship fund have been put in place? That is what is important.

[Jane Ellison]

My hon. Friend rightly brings us back to the human factor. He is right to highlight that the heart of what we want to do is to get people back in payment, where they should be, and to relieve hardship. I will now move quickly towards the end of my remarks. Mr Speaker has been very indulgent.

Among the discussions happening at the moment, HMRC has agreed to the transfer of Concentrix staff to HMRC. Concentrix has begun consulting its staff on this point and anyone transferring to HMRC will be supported through further training to help us deliver a quality public service.

It is also right, as the motion suggests and the shadow Minister challenges, that we look long and hard at what went so wrong with Concentrix’s performance. Not only do we owe that to all those who were caused worry or distress as a result of these failures, but it is also of huge importance that we learn from what happened and prevent any similar issues arising in any future contracts across government. That is why HMRC will be looking at how the contract with Concentrix was managed. It accepts it has lessons to learn. It has given evidence to one Select Committee already and will be giving evidence to at least one other—learning lessons and undertaking analysis of the claims.

Members will be keen to see an unbiased, independent assessment. As has been alluded to already, the independent National Audit Office, which scrutinises public spending, has announced it will be conducting an inquiry into the Concentrix contract. HMRC will work and co-operate with the NAO very closely to support that inquiry. The investigations will undoubtedly include, as the motion suggests, a consideration of the knock-on effects that may have been caused to other services provided by HMRC. As I have outlined, HMRC has needed to deploy extra staff to address the problems encountered, but I reassure the House that it is currently managing the increased workload effectively. Again, that is a testament to the efforts of its staff. It is also a reflection of the flexibility HMRC possesses. It is a large organisation capable of moving staff around quickly and dealing with peaks of demand, which it is accustomed to handling at various points in the year.

During the debate we have touched a number of times on the point about mitigating suffering. As I set out, our first course of action is to ensure that we get people’s tax credit claims back on track. HMRC is working hard to get the information needed from claimants to put anyone entitled to tax credits back into payment, including paying any arrears to which they are entitled. In parallel, HMRC is taking forward any requests for reviews of Concentrix’s decisions. Indeed, many decisions have been overturned. I have made inquiries and it is fair to say that, largely, they have not been due to original errors, but have followed the provision of additional information that has been obtained through the process of the mandatory review. So many of these problems have been caused because people did not, or were not able to, respond to the first timetable they were given. They have now provided that information—the hon. Member for Garston and Halewood (Maria Eagle) asked about this earlier—and we have been able to reassess their claims.

We have also made it a priority to address urgent cases of hardship through the usual mechanisms, but I will look at the point made by the Chair of the Work and Pensions Committee. If anyone has been caused undue distress or financial loss following errors or wrongdoing by Concentrix, they should contact HMRC. Such complaints will be taken very seriously, with a thorough examination of all the evidence. Where mistakes have been made, HMRC will not only make sure claimants are now being paid correctly, but pay compensation where appropriate.

It may be helpful for colleagues to know that I have asked to be told on an ongoing basis the issues that Members are bringing up with HMRC. Someone used the phrase “early warning signal”. Members’ complaints—Members from both sides of the House have been assiduous in representing their constituents—are a very good early warning signal for when things might not be right.

In conclusion, it is undoubtedly the case that there remains too much fraud and error in the tax credits system. It is a complicated system and it is very easy for many honest people to get it wrong. Error and fraud stood at £1.37 billion in 2014-15, so it is right that the Government—any Government—are determined to spend taxpayer money sensibly and sustainably, and take action to address that. We want to ensure that those who are entitled to tax credits get them, but, as we all know, it is vital we prevent overpayments that will then need to be paid back. We have all seen the enormous distress that this causes to vulnerable people. Often, just through not supplying the right information and getting muddled up about a form, people end up owing a lot of money, and that causes a lot of distress.

Progress is being made. Error and fraud in the tax credit system are now close to their lowest levels since its introduction in 2003. We are not going to take a step back in our efforts to ensure we have a fair tax system that tackles non-compliance in all its forms. We announced an extra £800 million in funding last year to do so, but that has always got to be balanced by the need to keep providing both the financial support and quality customer service that people, whatever their income level, are entitled to. On this occasion, the balance was not appropriate. It is for that reason we have taken the action I have outlined to put the situation right. We want to support people who are struggling with their claims and we want to reinstate payments to those who are entitled to them.

I am sure that many of the comments that have been made so far, and will be made in the debate that follows, will be fair. I will not agree with all the points made, but there has been much fair comment. For that reason, we will not oppose the motion. Above all, we want a fair outcome for everyone affected and we want to learn important lessons to ensure this sort of thing does not happen again. We must ensure that these important public services work for the most vulnerable in our communities.