Tax Credits: Concentrix

Lord Elystan-Morgan Excerpts

Wednesday 14th September 2016 Lords Chamber

[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.

[Lord Elystan-Morgan (CB)]

My Lords, I thank the Minister for the tone with which he has approached this somewhat embarrassing Question. Is it not the case that outsourcing was entirely inappropriate in this context? The constitutional position surely is that the Inland Revenue acts as an organ of state for the collection of taxes and exercises its functions in a quasi-judicial way. This is utterly contrary to that basic principle. Not only is it a breach of principle but, in so far as performance is concerned, it has been blatantly incompetent. Apparently 6,000 people found that their tax credits had been cancelled unlawfully and that 64% of the claims made against Concentrix have succeeded.

[Lord Young of Cookham]

I am grateful to the noble Lord for what he has just said. As for mandatory reconsiderations which are the appeals against the decision, the noble Lord is right that 67.97% end up in the customer’s favour and 32.03% in favour of HMRC. At the moment, the number of mandatory reconsiderations awaiting decision is 2,197. That is when benefit has been stopped and the claimant has asked for that decision to be reviewed. I understand the point the noble Lord makes about outsourcing. I am not sure that I would go quite as far as saying that it was totally inappropriate ab initio to outsource this to the private sector. I hope that what I said in response to the noble Lord, Lord Davies, that this contract is not being renewed gives him some assurance.