Concentrix: Tax Credit Claimants

Simon Kirby Excerpts

Tuesday 18th October 2016 Westminster Hall

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

It is a pleasure to serve under your chairmanship today, Mr Nuttall, in my first debate in Westminster Hall. I give the Financial Secretary’s apologies: she is on a Bill Committee and cannot be in two places at once. I have listened carefully to what has been a very interesting debate and will do my best to answer all the questions.

I congratulate the right hon. Member for Slough (Fiona Mactaggart) on securing the debate and take this opportunity to thank all right hon. and hon. Members for their efforts, not just in the debate but during the past few weeks, supporting constituents and bringing to our attention the difficulties that constituents are experiencing with their claims for tax credits. I reassure hon. Members that we are making every effort possible to resolve those difficulties as soon as possible and to make sure that the support provided through tax credits reaches those who really need it. There is no doubt that last month we were falling short in the level of customer service that we were providing to claimants, and I am very sorry about that.

In our efforts to tackle error and fraud in tax credits, we had engaged Concentrix to investigate claims and it did help us to drive down error and fraud to almost the lowest level since tax credits began. However, faced with a high volume of calls, Concentrix struggled to provide the kind of service that people had a right to expect—indeed, the kind of service stipulated in its contract. That led to a stressful time for a lot of people, including some of the most vulnerable, as they struggled to reach Concentrix to resolve any queries about their entitlement to tax credits. Let me be clear that that was not good enough, which is why we stepped in to get things back on track.

[Ms Angela Eagle]

Where did the information, particularly on cohabitation, come from? So many of our constituents have been accused of cohabiting with the previous tenant of their usually rented property. Were the data HMRC-matched or did Concentrix do it all on its own?

[Simon Kirby]

I am going to reach that point later. Very briefly, HMRC provided third-party data to Concentrix, which then chose who to pursue from those data.

[Neil Gray (Airdrie and Shotts) (SNP)]

We have heard today of constituents who have lost employment, college courses and access to childcare, and have been forced to go to food banks and take out payday loans, which inflicts stress and trauma not only on the parents but on the children. Having admitted that it was the responsibility of HMRC as well as Concentrix, will the Minister commit to expanding the compensation available to reflect the hardship and trauma inflicted on those people?

[Simon Kirby]

I will make some progress, and if the hon. Gentleman listens carefully, he may well hear some things that are helpful to that question. Before I turn to those points, let me outline what we are doing.

First, as my hon. Friend the Financial Secretary announced in the House last month, HMRC is not passing any new cases to Concentrix. We have been very clear that the contract will not be renewed beyond the end date of May 2017. Secondly, staff at HMRC are, as we speak, making every effort to resolve all open cases to ensure people get the payments they need and deserve. HMRC took back 181,000 outstanding cases from Concentrix and it has already dealt with more than 149,000—82%—of them. I would like to reassure everyone whose case remains open that we are making every effort to complete those cases within the next couple of weeks. It really is a priority.

[Angela Crawley]

Will the Minister give way?

[Simon Kirby]

I will not give way.

Thirdly, anyone who does not agree with Concentrix’s decision has a right to ask for a review called a mandatory reconsideration. HMRC has allocated its own staff to carry out such reviews within 21 days of the request. It is a large organisation with flexible staffing, so it is able to deal with peaks and troughs of demand. The hon. Member for Aberavon (Stephen Kinnock) mentioned the issue of extra costs, but I am confident that there will not be any.

[Patricia Gibson]

Given the extra work being created for HMRC to clean up the mess created by Concentrix, does the Minister have any view on the fact that one third of HMRC staff will be cut by 2021?

--- Later in debate ---

[Simon Kirby]

As I said, HMRC has a large number of staff, who are flexible and deal with the peaks and troughs of demand. If HMRC, after receiving the relevant information and reviewing the case, finds that the claimant is entitled to tax credits, they can expect to see that money in their bank accounts within four working days.

Lastly, we are working with hon. Members to help their constituents who are struggling to resolve any issues. We have extended opening hours and have put extra advisers on the tax credits hotline for MPs, which is now handling about 200 calls a day. I am pleased to inform hon. Members that my hon. Friend the Financial Secretary, following last month’s drop-in session, will be holding another session tomorrow in the House of Commons Library.

[Angela Crawley]

The news that HMRC will not renew the contract with Concentrix is welcome. Those responsible for these reprehensible practices should be held to account. When these services are brought back in-house, we must ensure that the blanket, baseless accusations and sanctions that have been applied will stop and that compensation will be made for the Government’s mistake. Will the Minister take the opportunity to apologise to my constituents and the women and men up and down the country who have experienced the Government’s failure?

[Simon Kirby]

None of us in this Chamber wants anyone not to receive money that they are entitled to, especially if they are parents with young, vulnerable children. It is up to all of us to help our constituents and ensure we once again provide a fast and efficient service to everyone.

Let me turn to some of the issues that were raised. I do not have a lot of time, so hon. Members will have to bear with me. I acknowledge the points made by many hon. Members about the contract. HMRC will be undertaking a lessons-learned exercise, and it will share those lessons across the Government. It is clear that they will help to inform other contracts in the future.

[Mark Durkan]

In that lessons-learned exercise, will HMRC look at the question of the so-called high-risk renewal scheme, which is at the very heart of all the troubles that our constituents have suffered?

[Simon Kirby]

There will be a number of reviews, and all lessons learned will be looked at in an open-minded manner. We will consider all elements of what has gone wrong and try to ensure that the mistakes, which have clearly happened, are not repeated.

I have talked about how the data are given to Concentrix. It is up to Concentrix to choose who to contact from those data. The £100 hardship payment is important. It is available to everyone, not just through the MPs’ hotline. It is not necessarily a one-off payment; future payments can be made if there is a delay in the decision. I encourage people in hardship to apply for it, because it is there to help people while we sort out this mess.

The hon. Member for Foyle (Mark Durkan) talked about the 30-day cut-off period. I can tell him that most customers have been able to provide the information required within 30 days. There was a question about money being clawed back from Concentrix. Concentrix is not paid for wrong decisions, and payment is reduced where it fails to meet performance standards. That is still happening. At the end of the day, it is paid to do a job, and if it does not do the job, it is not paid for it. I have noted the comments about letters being lost.

In conclusion, I thank everyone here. This has been a short debate, and it would have been nice to have more time for contributions. I am here to listen, and I have listened very carefully.