Concentrix

Simon Kirby Excerpts

Wednesday 26th October 2016 Commons Chamber

[The Economic Secretary to the Treasury (Simon Kirby)]

This has been a thoughtful debate. I thank all hon. Members for their contributions and efforts to support their constituents. It is right and appropriate that I thank MPs’ staff, who have worked hard to help constituents with their tax credit claims.

It is clear—there is no doubt—that mistakes were made in HMRC’s partnership with Concentrix. As my hon. Friend the Financial Secretary to the Treasury said, it is right that we take action to stop errors and fraud in the tax credit system. That was why HMRC entered into a contract with Concentrix to support that action, which—let us be clear about this—delivered millions of pounds of savings and achieved close to the lowest level of fraud and error in the tax credit system since it began.

I reiterate that this is all about people. It is about making sure that the most vulnerable people are paid appropriately and that errors are not made. It is often very difficult for the most vulnerable people to deal with overpayments.

[Maria Eagle]

Given the poor quality of some of the information that Concentrix has used—information about tenants, previous tenants, people who are dead and people who live in the same block but not in the same house—how can the Minister justify putting our constituents through the pain of having their payments stopped on such very poor information?

[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.

[Maria Eagle]

Would this be an opportunity for the Minister to tell the House why the information used was so very poor?

[Simon Kirby]

Some of the information used was very poor—some of it applied to people who no longer lived at the address—but, at the end of the day, the review will provide lessons for us all to learn.

The hon. Member for Paisley and Renfrewshire South said that the evidence was flimsy. HMRC sent Concentrix cases to review if it thought that they were worth checking because there was an indication that the tax credits claim might be incorrect. Concentrix and HMRC will never be able to screen out all cases that do not involve error or fraud through data analytics alone. That is why—this point is important—HMRC and Concentrix write to customers to ask for more evidence to inform decisions.

The hon. Lady asked for an apology. At a sitting of the Work and Pensions Committee on 13 October, the chief executive of HMRC apologised for the worry and distress caused to claimants. On behalf of the Government, I echo that apology today.

The hon. Member for Stretford and Urmston (Kate Green) said that she thought that the letters were unconvincing and misleading. This is an area in which there are lessons to be learned. It was said that customers could not provide the evidence requested. Most people were able to provide the information asked for, but we want to make it easier and cheaper to supply information in the future, so we are looking at ways of improving the customer journey on tax credits.

[Louise Haigh]

Will the Minister give way?

[Simon Kirby]

I will keep going, if I may.

The hon. Member for Stretford and Urmston also asked whether the contract unfairly discriminated against women. It is important to note that as of April 2016, 88% of single claims were made by women, and 80% of single claims sent to Concentrix to check with regard to high-risk renewal were from women. I recognise this—

[Kate Green]

Will the Minister give way?

[Simon Kirby]

I will not—I have to respond to a lot of people.

I recognise that sensitivity is needed on tax credit claims and that claimants should be treated with dignity and respect. The hon. Lady also asked about penalties. The figures that will and have been deducted from payments, and the detailed calculations, cannot be disclosed at this point as they are commercially sensitive, but the amounts will be fair and appropriate.

The hon. Member for Salford and Eccles (Rebecca Long Bailey) said that Concentrix was getting a rap on the knuckles. I point out that it is actually losing the contract.

My hon. Friends the Members for Torbay (Kevin Foster) and for Gloucester (Richard Graham) made particularly thoughtful and considered contributions. They have obviously given the matter great thought.

The hon. Member for Ayr, Carrick and Cumnock (Corri Wilson) asked whether the contract was ended only because of poor call handling. That was not the case. The poor call handling had an impact on customers and resulted directly in tax credits being stopped. She also mentioned the downsizing of HMRC. An extra £800 million has been announced for HMRC. Using a private company in this way offered a cost-effective method of reaching a large number of people.

The hon. Member for Cardiff South and Penarth (Stephen Doughty) asked whether this situation spelled the end for outsourcing. This is about cutting down on errors and some fraud, but HMRC will evaluate each case on its merits to deliver value for money for the taxpayer. It is fair to say that the lessons learned from this situation will help to inform future contracts.

[Louise Haigh]

That is the central point. As my hon. Friend the Member for Garston and Halewood (Maria Eagle) said, the information was duff, and was acted on incorrectly, because the contract was designed to incentivise Concentrix through profit to incorrectly target people and strip them of their tax credits. Will the Minister commit to reviewing payment by results across our welfare system?

[Simon Kirby]

I will not commit to that. The hon. Lady’s points will be picked up by the NAO. Not all the information was duff, but there are clearly lessons to learn from the exercise.

The hon. Member for Foyle (Mark Durkan) talked about the 30-day cut-off. Tax credit regulations require a claimant to be given a minimum of 30 days to respond to a request for information. The hon. Member for Dundee West (Chris Law) mentioned training. I assure him that Concentrix staff are trained in the same way as HMRC staff.

The hon. Member for Garston and Halewood (Maria Eagle) asked about unresolved cases. I am not sure whether the Financial Secretary was in the Chamber to hear that, but if the hon. Lady writes to my hon. Friend, she will, I am sure, do her very best to help to resolve those cases. The hon. Lady also asked about the significance of August. August was a particularly busy time.

[Mark Durkan]

The Financial Secretary told me in a written answer yesterday that between 1 August and 31 August, HMRC automatically stopped 365,483 tax credits—in just that one month—as a direct result of customers failing to comply with the requirements of the annual renewal process. How many stoppages were made by Concentrix and how many were made directly by HMRC itself?

[Simon Kirby]

I am happy to commit to look carefully at that matter and to get back to the hon. Gentleman.

I clarify that hardship payments are effectively tax credits brought forward. Compensation, however, is not offset against tax credits and is a separate payment. That is an important distinction to make.

The hon. Member for Ochil and South Perthshire (Ms Ahmed-Sheikh) mentioned the timeline. It is important to understand the timeline, and she makes valuable points about how we can ease the customer journey and introduce new measures. That is work in progress, and I do not think there is a lot of disagreement about some of her more sensible suggestions.

In response to the hon. Member for Bootle, I would say that a lot of issues have been raised in the debate. They will be looked at very carefully by the National Audit Office. We are giving careful consideration to the balance of the contract with Concentrix to make sure that nothing else goes wrong. This is about making sure that the most vulnerable people who need help get it, and that we move forward and learn from the exercise.

Although we recognise that the service provided was simply not good enough, it was right to review people’s claims for tax credits. That must go hand in hand with quality customer service that minimises distress and disruption to the people involved. Concentrix fell short of providing that standard of service in recent times, and, as a result, a large number of people were caused undue distress and worry. We have taken immediate action to restore a fast, fair and efficient service to anyone claiming tax credits. We will take further action in the days and months ahead. We will look at what went wrong, and at the NAO report, and learn from those lessons. We want to ensure that we provide the kind of quality tax and benefits service that the British public deserve.

Question put and agreed to.

Resolved,

That this House notes that Concentrix has not fully met the performance standards set out in its contract with the HM Revenue and Customs to correct tax credit claims, and welcomes the announcement that the services performed by Concentrix will be brought back in-house to HMRC next year; and calls on the Government to conduct a comprehensive investigation into the performance of Concentrix under its contract with HMRC, which includes a consideration of the potential effect on other HMRC services, take urgent action to compensate people who have erroneously had tax credits withdrawn by the company, and in doing so mitigate any adverse effect or reduction in service for claimants.