Concentrix

Kevin Foster Excerpts

Wednesday 26th October 2016 Commons Chamber

[Rebecca Long Bailey]

We can all learn lessons by reviewing the handling of payment-by-results contracts. I hope that the Minister will consider those experiences when she conducts a review of the delivery of such contracts.

[Kevin Foster (Torbay) (Con)]

Will the hon. Lady give way?

[Sammy Wilson (East Antrim) (DUP)]

Will the hon. Lady give way?

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[Kevin Foster (Torbay) (Con)]

It is a pleasure to follow the hon. Member for Paisley and Renfrewshire South (Mhairi Black). I welcome the debate, and the opportunity that it gives us to talk about the issues involved in the Concentrix contract, although it is worth noting that it is a month since our exchanges in the House about the Government’s intention to cancel it.

I believe that our goal should be to ensure that the people who pay for the benefits system through their taxes can be confident that fraud and error are kept to a minimum. However, that went badly wrong in this instance, and examples in my constituency reveal some of the places where it went wrong. The hon. Member for Paisley and Renfrewshire South gave us the interesting example of a “philandering shop” in Scotland. In my constituency, someone had supposedly moved in with a bloke living down the road. They rang Concentrix to try to deal with the matter and get some answers, but found that it was quicker to walk to my office with the phone—while still on hold—and sit there for about 20 minutes while we made them a cup of tea and enjoyed the “hold” music that they were listening to. To prove that this had happened, I took a photo of the phone as it went through the hour on hold in my office.

To be fair to Concentrix, it did only take four minutes to tell my constituent “Actually, you should ring HMRC”, but that was the only part of the customer service that was particularly speedy. The only other remarkable thing is that, given the level of concern and the number of issues that have been raised by Members and others, Concentrix was itself surprised to be told that the contract would not be renewed.

[Neil Gray]

Does the hon. Gentleman agree that our constituents deserve an apology for the way in which this matter has been handled not just by Concentrix, but by his party’s Government and HMRC?

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[Kevin Foster]

The focus should be on what went wrong, waiting to see what the National Audit Office comes up with—I shall say more about that shortly—observing the reaction to that and dealing with the issues, rather than getting into a debate about whether the gesture of an apology should be made. That said, I am pleased that the Government are not seeking to nit-pick the Opposition motion, that we are not going to divide the House, and that, effectively, we will support the motion. That, I think, speaks for itself.

In the light of the problems that had been raised with me, I welcomed the Government’s action in making it very clear that the contract would not be renewed. It is over a month since the last new case was sent to Concentrix. I am also pleased that HMRC is moving in to resolve many of the issues.

[Patricia Gibson]

Will the hon. Gentleman give way?

[Kevin Foster]

Will the hon. Lady give it a moment? I shall make some more progress, for now.

I said that HMRC was moving in. It should be noted that that organisation has had its own customer service issues in the past. In fact, in the next half hour my fellow members of the Public Accounts Committee will be discussing and examining its customer service. There have been some welcome improvements recently, but many Members who are present today will have had their own experiences of sitting and waiting to get through to the “hotline”.

[Sammy Wilson]

It is not surprising that when HMRC was challenged to specify the number of cases it had dealt with that had involved errors and how long it had taken it to respond to those errors, it could not give the figures. We cannot even make a comparison between HMRC’s performance and that of Concentrix.

[Kevin Foster]

This afternoon we received a fairly detailed report produced by the National Audit Office on HMRC’s annual report, which is being discussed by the Public Accounts Committee and which goes into some depth about HMRC’s performance and customer service standards. It can be read in comparison with what we have heard about Concentrix. The PAC is also discussing the tax gap, and the need to ensure that HMRC is performing as we would expect it to in ensuring that the taxes for which we legislate in the House are paid by those who are required to pay them. I genuinely welcome the fact that the National Audit Office will be investigating this matter, and, in that context, I think that some of the comments that have been made today may have been slightly premature.

I was going to intervene on the shadow Minister when she was commenting on our having an independent and fearless inquiry commissioned by the Government. I was struggling to think how more independent and fearless an inquiry could be than a report by the NAO, which is an arm of this Parliament, not of Government. It produces its reports independently. Yes, it will liaise with Treasury officials to ensure that facts are agreed when coming to its conclusions, but ultimately the Comptroller and Auditor General and his team answer to this House via the PAC. It has never held back from making comments, no matter how difficult and challenging for Government Departments, where required. The shadow Minister might wish to intervene and tell us how she felt that another inquiry would be different from that, but I think the right way forward is to get the NAO to look at this and bring a report that can be scrutinised fully and in depth in this House from a team of subject experts who understand how HMRC, the DWP and the benefits system work, and who owe a duty to Parliament, not to the Government. I am sure the depth of information they bring forward will inform future debates on this subject.

[Chris Law]

Is it not clear, then, that the approach over past years of reducing HMRC staff numbers must stop, and stop today? The current Government programme to reduce staff numbers from 55,000 to 35,000 is short-sighted, and from the evidence we have heard today it is clearly time to reverse that.

[Kevin Foster]

I encourage the hon. Gentleman to read the HMRC report being discussed this afternoon by the PAC; it might be worth his attending the session if he gets the chance. It is worth noting that with new leadership, which has been needed for some time, HMRC is starting to turn around its customer service, by moving more staff into dealing with post, for example. There is some evidence that the customer service is improving, therefore, which is welcome, although I know that some of these assertions will be robustly tested by a number of Members, including the hon. Gentleman’s party colleague and PAC member the hon. Member for Coatbridge, Chryston and Bellshill (Philip Boswell).

It is vital that the investigation is full and that we look at what comes out of it. I welcome the Minister’s saying that there is an ongoing negotiation about concluding the contract early. We cannot go into the details of that today for obvious reasons, but I hope the work being done to bring this whole sorry tale to an end will be shared with the NAO as part of its inquiry.

One of the conclusions to be drawn is that it is clear that people have been caused pain and suffering that they should not have been caused. People have been subjected to allegations that were flagrantly untrue: the “philandering shop”; the person living down the road; someone who has been dead for some years. We should think about the way the contractor went about things—sending letters with the contractor’s logo that looked very similar to official Government or HMRC letters. We might have debates about whether in future the symbol of the Crown and HMRC should be used on a letter sent by a contractor.

[Dr Philippa Whitford]

Many of the constituents who came to me did not appear to have received a letter at all. A letter with some strange logo on it might not register as being what it is about and therefore might get overlooked.

[Kevin Foster]

I understand that point, but the evidence from my constituency case load is that it cut both ways. Some people saw a logo that looked like it was from HMRC and wondered what the letter was about. This matter might require further inquiry, and we should consider the information that the NAO will bring forward. The NAO does not just look at the sums. It is not just going to work out how many people got paid for what. It will also go into the detail around the customer service, and certainly in previous reports it has been extremely thorough when doing so.

I welcome the overall tone of the Minister’s response to this motion, and I welcome the fact that the Government took clear and decisive action to bring this contract to an end and are continuing to do that and to prevent more people from having to experience the issues many Members have highlighted today. I hope the monitoring will go on because, as we have seen with past issues to do with HMRC, an in-house solution is not necessarily a magic bullet to achieving amazing customer service. We have only to look at past debates on HMRC’s performance to see that. I welcome some of the tone of today’s debate, but it is now absolutely clear that we need to resolve the outstanding cases, let the NAO do its work and then form our conclusions based on the evidence it brings to us.

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[Louise Haigh]

That is a major concern, not least because HMRC has now had to allocate hundreds more staff to deal with the backlog that Concentrix caused, because this was failure on a monumental scale from start to finish. It seems that Ministers did not pay the blindest bit of notice until the scandal reached the media, because we now know that HMRC was about to renew the contract before the scandal hit.

The Government have traded on welfare as a dirty word, and now they are seeing the despicable consequences of their political attacks: single parents and families who have done nothing wrong being ruthlessly pursued by an unaccountable US firm for profit. Could this contract have been drawn up had the Government not fuelled a contemptible narrative about those on low pay and those who rely on tax credits to get by?

We welcome the fact that the National Audit Office will be investigating the drawing-up of this contract. Can we be assured that that will include the management of the contract and the profiling assumptions underpinning it? Will the NAO release any impact assessment that must have accompanied the contract? Will the Minister assure us that any compensation awarded will not be counted towards tax credit awards?

[Kevin Foster]

Does the hon. Lady agree that the National Audit Office is independent and works for this Parliament, not for the Government? Therefore, the NAO would structure how it conducted its inquiry, not necessarily a Minister. That is the core of what we want: somebody independent who will get to the nub of this and present evidence to this Parliament, not necessarily the Government.

[Louise Haigh]

I completely agree, and it is vital that this is an independent review, because, as we have heard on both sides of the debate, these problems originate from the Government themselves. However, we need to know that this information will be published, and if the NAO does not do that, we would call on the Minister to publish it alongside this inquiry.

Above all else, if the Government’s rhetoric is worth a penny, they will surely pledge to call time on contracts such as this, which target innocent single parents and families, and encourage the private sector to profit from them. That has no place in our welfare system.

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[Peter Dowd (Bootle) (Lab)]

I am glad to follow the hon. Member for Inverclyde (Ronnie Cowan).

We have heard many interventions and speeches. The hon. Member for Paisley and Renfrewshire South (Mhairi Black) talked about a fishing expedition on the part of Concentrix. She enlightened us about the real Casanova of Scotland, R. S. McColl—I thank her for that—but more importantly, the cataclysmic effect of this flawed process. The hon. Member for Torbay (Kevin Foster), in a thoughtful contribution, gave us the experiences of his constituents and welcomed the Government’s actions in relation to the renewal of the contract.

My hon. Friend the Member for Stretford and Urmston (Kate Green) focused on the policy design that has led to single women, in particular, being affected or targeted, talking about the effects on their children and setting out a series of questions that went to the heart of the matter. The hon. Member for Gloucester (Richard Graham) discussed the relative value and efficiency of the contractor’s services, the role of HMRC, and the role of incentives in contracts of this nature. The hon. Member for Ayr, Carrick and Cumnock (Corri Wilson) talked about a conflict of interest and the bad practice of Concentrix. My hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) spoke of a series of constituents, usually single mothers, who have been distressed by the process, citing a catalogue of errors, and the need to fast-track these people’s benefits. My hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones) talked about the hardship caused to his constituents and the common factors in the contractor’s lack of understanding and of compromise.

The hon. Member for Foyle (Mark Durkan) welcomed the personal intervention of the Financial Secretary, but questioned HMRC’s role in the process and spoke of the need for a change in its culture. The hon. Member for Dundee West (Chris Law) gave a number of examples of how people are being pushed into poverty. My hon. Friend the Member for Garston and Halewood (Maria Eagle) mentioned the influx of cases in August and asked what had caused that spike. She also talked about phantom tenants, the unreachable, and the harsh and inaccessible bureaucracy.

My hon. Friend the Member for Sheffield, Heeley (Louise Haigh) said that we want a system that supports people, not conglomerates, and a Government who will ensure that people, not corporates, are at the top of the agenda. My hon. Friend the Member for Ogmore (Chris Elmore) talked about the effect on single mothers, but also asked the key question of how many others have been affected, have not been able to reach out to their MPs and have suffered in silence.

The hon. Member for Ochil and South Perthshire (Ms Ahmed-Sheikh) suggested providing support for free communication with HMRC, and the hon. Member for Inverclyde said that the responsibility lies with the Government and that the citizen’s relationship should be with the state, not individual contractors.

I welcome the Minister’s mea culpa, but it does not go far enough. In last week’s Westminster Hall debate, I said that I, like other hon. Members, had been contacted by distressed constituents who had had their child tax credits stopped, with scant attention paid to due process. In effect, the plenipotentiary powers given by the Government to Concentrix to act as it saw fit to punish and penalise tax credit claimants were used with an alacrity bordering on the enthusiastic and manic. It has come to something when it is difficult to put a cigarette paper between the question of who, out of the Government and Concentrix, has been the bigger of the two culprits, but, following the principle of, “Whoever pays the piper calls the tune,” I opt for the Government.

As I said in last week’s debate, it does not take a genius to work out that, if a company is paid on the basis of bonus or commission to find tax credit error and fraud, it will start with the easy targets. In pursuit of a business model approved by the Government, Concentrix pursued people, mainly working women, to provide information. It was nothing short of overbearing state intrusion into private lives, but it was done under the guise of reclaiming taxpayers’ money from fraudsters and cheats, which is how many people felt that they were treated.

The plain fact, however, is that there was no evidence. In many cases, the victims of that intrusion were left penniless and had little capacity to fight back, as many Members have said. Meanwhile, the Savings (Government Contributions) Bill, which is currently in Committee, encourages people to save money. One agent of the Government administers the giving away of taxpayers’ money while another takes money away, by diktat, from working women. What a topsy-turvy state of affairs.

The whole process was deeply flawed and, as has been said, operated on the presumption that people were guilty until proven innocent. Apparently, a claimant would be sent a letter by Concentrix indicating that they were not meeting the standards for a child tax credit claim, and requiring them to provide evidence of their occupancy arrangement. Some attempted to call Concentrix, only to find that the number was engaged, but if the company did not hear from the claimant, their tax credits were stopped summarily.

I do not know whether Ministers were consulted on, or asked to sign off, that process. I asked that question last week, but did not receive an answer, so I ask them to enlighten us. Even Atos did not have the power to withdraw benefits. Concentrix was given carte blanche to do so, in a licensed way, by the Government, who were in the throes of renewing the contract for a job well done, which is remarkable. Did Ministers ask why Concentrix had so many savings on its books, and did they listen to the complaints of many of our constituents at an earlier stage?

Last week, the Economic Secretary claimed, very creatively, that it was the Government who stepped in to get things back on track when they realised that the service being provided by Concentrix was not good enough. That rewriting of history would be risible if the matter was not so serious for thousands of mothers all over the country. In reality, it was the Opposition who originally asked the National Audit Office to investigate, and we pushed for oversight and demanded action for the thousands of families who have still not received payments from Concentrix. The Government took action only under duress and pressure from the Opposition and the national media.

[Kevin Foster]

Does the shadow Minister agree that, given earlier comments, it is important that the National Audit Office leads the investigation into what happened, because it is independent and answers, ultimately, to this House, not to the Government?

[Peter Dowd]

That is a statement of the situation as it is. The key thing is that we need an independent investigation to get to the bottom of this.

The Government have said that the contract will not be renewed beyond the end of May 2017, but that still leaves us seven months. I am pleased that staff have been brought into HMRC, and I would like to know what measures the Government are putting in place to ensure that there is total oversight of Concentrix throughout the period and to make sure that nothing else goes wrong. When all is said and done, this is a question of the performance management of a government contractor, and a clear lack of oversight by the Government.

I deduced from the Economic Secretary’s inadequate response to the Westminster Hall debate last week that HMRC handed over third-party data to Concentrix and left the company to it. There was no oversight and, in the Minister’s own words:

“Concentrix…then chose who to pursue from those data.”—[Official Report, 18 October 2016; Vol. 615, c. 261WH.]

The Government have given Concentrix a free hand to intimidate and falsely accuse hard-working mothers of fraud. The Opposition want to know who signed off that decision and why there was no accountability. The Government have announced a £100 hardship payment for those affected, but no amount of money can make up for the struggles that those women faced after their tax credits were wrongly stopped, and we need an apology. As many other Members have done, I ask the Government to give that apology.

Concentrix will have the contract for a few more months, but it does not seem to have suffered any sort of penalty for its actions. We would like to know what is happening in that regard. Can we have a precise figure for how many decisions Concentrix got wrong? In how many instances was payment reduced because Concentrix failed to meet its performance standards? Perhaps the Government’s refusal to answer such questions and release the relevant information is because even with deductions for poor performance, Concentrix has still made huge profits on the backs of desperate and vulnerable people. We need answers to these questions. Perhaps an independent investigation—maybe by the NAO—will give us those answers, but whoever gives them to us, we need them as soon as possible.

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[Simon Kirby]

I will cover that matter later, but there are clearly lessons for all of us to learn.

[Kevin Foster]

Given the number of people affected, what work will the Government—the Treasury, working with HMRC—carry out to help local advice centres that, like Members of Parliament, may be approached by people for advice about what to do if they receive such letters?

[Simon Kirby]

I will certainly ask HMRC to look into that. The important point is that this is about helping people. It is easy to stand in the Chamber citing figures and trying to pretend that something is not what it is. This is about making sure that the most vulnerable people get the money that they deserve, and about clearing the backlog as quickly as possible.

This issue is about customer service. Everyone has a right to expect a good level of customer service. There is no doubt that the customer service provided in recent times was simply not good enough and not up to the standard clearly specified in the contract. As a result of that poor performance, a great deal of worry and distress has been caused to the often vulnerable people who claim this benefit. We heard lots of very good examples of that today. I do not think that any MP is in any doubt that vulnerable people have suffered worry and distress. I advise anyone who has been adversely affected to get in touch with HMRC, which will take all complaints seriously and provide compensation where appropriate.

I move on to specific issues that hon. Members raised. The hon. Member for Paisley and Renfrewshire South (Mhairi Black) suggested that Concentrix targeted people at random and engaged in fishing expeditions, which the hon. Member for Bootle (Peter Dowd) also mentioned. That was not the case—Concentrix was not allowed to engage in fishing expeditions. It is important to note that when information was incomplete or suggested that something was wrong, customers were asked to provide further information to enable an informed decision to be reached.