Concentrix

Debate between Rebecca Long Bailey and Richard Arkless

Wednesday 26th October 2016 Commons Chamber

[Rebecca Long Bailey]

My hon. Friend makes a powerful point; he is 100% correct. This is not simply a case of rapping Concentrix on the back of the hand. These contractual failings have caused real human suffering, and the Government need to address them urgently.

[Richard Arkless (Dumfries and Galloway) (SNP)]

Is the hon. Lady aware of the spikes in such claims that she talks about arising in the week before conference recess and in the days following, when Concentrix was stripped of the contract? We all know what is happening here: drilling down into the contract to avoid exit penalties. Will the Government shed any light on that?

[Rebecca Long Bailey]

I hope that the Minister will address the hon. Gentleman’s question in her speech because we all want to hear the answer.

Several provisions in the contract relate to payment by delivery. The head of the National Audit Office stated in June 2015:

“While its supporters argue that, by its nature, Payment by Results offers value for money, these contracts are hard to get right, which generates risk and cost for commissioners…the increased risk and cost may be justified, but this requires credible evidence. Without such evidence, commissioners may be using this mechanism in circumstances to which it is ill-suited, to the detriment of value for money.”

Under schedule A6.1 of the contract, HMRC required Concentrix to deliver, over the duration of the contract, some £1.03 billion in savings in annually managed expenditure. I appreciate that the contract used estimates to forecast potential savings, but given the model, how could anyone have been certain about the position without a crystal ball? In answer to parliamentary questions, it was revealed that total savings in annual managed expenditure were £2.3 million in 2014-15, £122.3 million in 2015-16, and £159.5 million in 2016-17, to mid-August 2016.