Outsourcing and Tax Credits

Debate between Simon Kirby and Maria Eagle

Friday 4th November 2016 Commons Chamber

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

rose—

[Maria Eagle (Garston and Halewood) (Lab)]

That’s not the Chancellor.

[Simon Kirby]

Not yet.

I can confirm that there has been no change in Government policy on outsourcing. I suspect that the hon. Member for Sheffield, Heeley (Louise Haigh) has asked this urgent question in the light of the recent concerns surrounding the Government’s outsourcing contract with Concentrix.

Her Majesty’s Revenue and Customs places the utmost importance on providing a quality service to its customers. As the Government have made clear, high standards were not met in recent months by Concentrix, the company HMRC had engaged to help us in the important work of tackling fraud and error in the tax credits system. Once this became clear, HMRC took steps to rectify the situation and deployed HMRC staff as quickly as possible. From that point, no new cases were passed to Concentrix, and HMRC took back 181,000 individual cases that were being managed by Concentrix. I can reassure the House that not only have all the 181,000 cases been finalised, but HMRC has now restored the expected quality levels of customer service to ensure people receive the tax credits to which they are entitled. HMRC continues to review outstanding cases in which a mandatory reconsideration has been requested, and it has taken steps regarding the future of the contract with Concentrix.

On 14 September, the Financial Secretary to the Treasury informed the House that HMRC would not be renewing the contract with Concentrix. Last week, she informed the House that HMRC is currently in discussions with Concentrix to agree a negotiated early exit to the contract. These commercial discussions continue. I want to be clear that HMRC will not go back to the market to seek another partner to replace Concentrix and provide additional capacity to challenge error and fraud in the tax credit system. There has, however, been no change in Government policy on outsourcing, which can be an appropriate way to deliver both quality public services and savings for the taxpayer. I assure the House that HMRC is committed to learning the lessons from the problems that have arisen over the past months, supported by the independent review of the National Audit Office.

--- Later in debate ---

[Maria Eagle (Garston and Halewood) (Lab)]

Some of my constituents have lost other moneys. They have gone into rent arrears and have bank charges to pay, for example. Will the Minister undertake to make sure that either Concentrix or HMRC compensates those people for their actual losses—caused, it must be remembered, when they were accused of having an undeclared partner who was dead or a previous tenant they had never known. This has nothing to do with my constituents and has everything to do with rank maladministration. I hope that the Minister will stand up today and confirm that these people will be compensated by Concentrix or HMRC.

[Simon Kirby]

The hon. Lady will be pleased to know that HMRC does run a compensation scheme. If her constituents—or her as their MP—would like to write, I am sure they will have some success.

Concentrix

Debate between Simon Kirby and Maria Eagle

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.

[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.