Tax Credits: Concentrix

– in the House of Commons at 12:53 pm on 14 September 2016.

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Photo of Rebecca Long-Bailey Rebecca Long-Bailey Shadow Chief Secretary to the Treasury, Member, Labour Party National Executive Committee 12:53, 14 September 2016

(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on Concentrix’s activities in relation to tax credit investigations made on behalf of Her Majesty’s Revenue and Customs.

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

I want to be very clear: the Government recognise the importance of tax credits to individuals and families. We all recognise that it is important for this support to reach the people who really need it. That is why HMRC works hard to check that it is making the correct payments, and to tackle any fraudulent claims. We must acknowledge that error and fraud exist in the system, and should be addressed to ensure taxpayers’ money is spent correctly. As part of this work, HMRC engaged Synnex-Concentrix Ltd in 2014 to help check people’s eligibility. As a result, almost £300 million of incorrect payments have been avoided.

I want to reassure the House on two key points. First, Concentrix has been paid only for making the right decisions; it has not received payment for taking someone’s money away wrongly. Secondly, Concentrix has not been allowed to engage in fishing expeditions or to pick on vulnerable claimants at random. Where there has been evidence to suggest a claim might not be correct, Concentrix has written to claimants to seek further information and confirm their eligibility. I realise—I know this as a constituency Member myself—that it can be stressful for someone to receive such a letter, but it is right that we investigate the full picture, with contributions from claimants themselves, to ensure we make the right payments. That is why both Concentrix and HMRC, where it does the same work, always send a letter and give claimants 30 days to provide information before taking any further action. It is important that people do indeed respond, and that they get in touch if they are struggling to respond to any of the questions.

Despite the best efforts of the staff manning the phones, Concentrix, with the high volume of calls in recent weeks, has not been providing the high levels of customer service that the public expect and which are required in its contract. HMRC has therefore given notice that this contract will not be renewed beyond its end date in May 2017. HMRC is also no longer passing new cases to Concentrix, but is instead working with it as a matter of urgency to improve the service it provides to claimants and to resolve outstanding cases. I can confirm to the House that 150 HMRC staff have been redeployed with immediate effect to help it to resolve any issues people are having with their claims as quickly as possible.

I realise that colleagues on both sides of the House are concerned to get difficult cases resolved and to assist vulnerable constituents appropriately. In addition to the extra resources I have mentioned, I have arranged a drop-in for Members in Room B, 1 Parliament Street between 9.30 and 11 am tomorrow, at which HMRC officials will be available to offer guidance to colleagues, should that be helpful.

Photo of Rebecca Long-Bailey Rebecca Long-Bailey Shadow Chief Secretary to the Treasury, Member, Labour Party National Executive Committee

I thank the Minister for her reply. Many hon. Members on both sides of the House have been contacted, as she has been, by distressed and anxious constituents—often hard-working individuals who have had their tax credits cut unfairly, in many cases pushing them into extreme hardship. Although Labour Members certainly welcome the fact that HMRC has finally taken action by announcing that the Concentrix contract will not be renewed, it is most regrettable that the Government undertook such action only when events were dramatically exposed by the media and, indeed, by my hon. Friend Louise Haigh and my right hon. Friend Frank Field.

It remains the case that Synnex-Concentrix will be carrying out these services for another eight months. There is therefore a risk that without radical amendments to the contract itself, service failures will continue. Of most concern is the fact that the payment model arguably creates a conflict of interest, as has been noted by the Social Security Advisory Committee. Will the Minister therefore confirm what arrangements she will make urgently to revise the contract to preserve justice for the claimants?

As the Minister stated, I understand that HMRC will redeploy 150 staff so that claimants can get through to advisers and resolve their claims. Will she confirm how the Government will monitor that? Will the Government now commit to an official investigation into Concentrix’s conduct since it was awarded the contract in 2014, so that we can determine how this situation was allowed to arise? Finally, has she given any consideration to the real prospect of bringing this service back in-house?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

I will try to answer those questions, but it is worth commenting that this Government, and indeed their predecessors, inherited a very complicated system. In the long term, the right answer is to replace tax credits, as is our intention, because we were bequeathed an unnecessarily complex system. However, we must make the system work while it is in operation, and that is now the focus of our activities.

On HMRC’s decision about the contract, I want to reassure the House that monitoring has taken place regularly throughout the contract. Indeed, HMRC has worked closely with Concentrix. It is the case that, as has been documented, performance has not been good in recent weeks. That has clearly been noted, and we are now taking action on it.

On the contract going forward, as I mentioned in my response to the urgent question, Concentrix will focus on resolving outstanding claims, not opening new ones. In other words, it will deal with those already open in an orderly and appropriate manner. HMRC is putting in additional resource. In particular, I have asked it to focus on the difficult cases—there have been some high-profile examples in recent days—to ensure that we resolve them as quickly as possible so that all our vulnerable constituents are helped and supported.

That is the key focus as we go forward. There is no need to go into inquiries and so on. We have a contract that is monitored on a regular basis. It will not be renewed when it comes to an end in May next year. The focus for all of us in the coming days and weeks—and for me and for HMRC in particular—is on making sure that the outstanding cases are resolved, especially those of the most vulnerable, and that people have the money to which they are correctly entitled.

Photo of Desmond Swayne Desmond Swayne Conservative, New Forest West

I have cases of women who have had their tax credits stopped because, they have been told, they are living with a man of whom they have never heard or, indeed, with the tenant of the property prior to them occupying it. Their benefits have been withdrawn. I am not sure that I need advice tomorrow morning in 1 Parliament Street—when, incidentally, the House is sitting. We need to know how quickly those cases can be reviewed.

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

I quite understand my right hon. Friend’s point. The drop-in is there as a facility should Members wish to use it, but it is not an alternative to the HMRC lines already in place. We encourage anyone affected to call the HMRC number on the letters they have received. We are putting significant additional resources into those helplines, with immediate effect, to make sure we can resolve the situation. I am reassured—although obviously I will be talking to HMRC consistently about this—that as soon as the facts of a case are resolved we can get money into people’s accounts in a short number of days.

Photo of Stewart Hosie Stewart Hosie SNP Deputy Leader, Shadow SNP Westminster Group Leader (Economy), Deputy Leader, Scottish National Party

I am delighted that the Concentrix contract is not to be renewed. It will come as some comfort, at least, to those who have been affected by its activity. That contract was designed to save £1 billion in fraud and overpayment. The Minister tells us some £300 million has been saved. How much of those so-called savings was as a result of false accusations by Concentrix against tax credit recipients? If somewhere between 120 and perhaps many thousands of people were affected, why was the contract not cancelled sooner? The cost of the contract was reputed to be some £75 million. How much do the Government intend to claw back to directly compensate those affected? The Minister tells us, and I am pleased to hear, that HMRC civil servants have been drafted in to clean up the mess, but how much will that cost the taxpayer in additional pay and will the Government be seeking payment from Concentrix to fund that remedial action?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

I am not able to respond immediately from the Dispatch Box to one or two of the points raised by the hon. Gentleman. My clear priority and that of HMRC at the moment is to make sure that we resolve the outstanding cases, and in particular the difficult cases for vulnerable constituents. We will then turn our mind to some of the other points that he made. We are not renewing the contract, but we intend to continue to bear down on error and fraud. That is important, as there is a lot in the system, but we have had a great deal of success in recent years in reducing it—the amount of fraud in the system has halved from £800 million to £400 million. We need to continue to bear down on that, because money that is fraudulently obtained is money that is not available to taxpayers. It remains vital that we address that matter. But for the moment, my primary consideration is resolving the difficult cases to make sure that we look after our most vulnerable citizens.

Photo of Stephen McPartland Stephen McPartland Conservative, Stevenage

I am a big fan of supporting those people who are trying very hard to get on in life and who depend on tax credits. One of my concerns is that over the next eight months those people will still be dealt with by Concentrix and will still have that fear of being falsely accused and prosecuted, almost, as they go forward. What reassurance can the Minister give that those people will be looked after, and will HMRC carry on with the contract in the future or will it issue it for new tender?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

I have laid out the arrangements we are putting in place. The contract ends next spring. In the meantime, HMRC will support Concentrix on the outstanding cases—in particular, looking at more complex cases and supporting back-office functions while Concentrix staff focus on resolving already open cases. It is important to have a bit of perspective. Concentrix has assisted the Government and, indeed, the taxpayer in correctly identifying a lot of claims as either erroneous or fraudulent. It is important to keep the matter in perspective, but HMRC has made clear its operational intention not to continue the contract beyond the spring.

Photo of Louise Haigh Louise Haigh Shadow Minister (Cabinet Office)

I thank the Minister and HMRC for reacting so quickly to issues and concerns raised in the House, but several questions remain. What estimate has been made of the current backlog needing to be dealt with by Concentrix and HMRC? How should those people currently being dealt with contact Concentrix—through the current helpline or by contacting HMRC directly? Why were these appalling failures not acted on before they were revealed in parliamentary questions, if HMRC was monitoring the contract so closely? Will HMRC bring the contract back in-house in May next year? Will the Minister today commit to a review of all payment-by-results contracts, which are completely inappropriate in our welfare system?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

I am aware that the hon. Lady has been very active on this—she has asked a number of parliamentary questions and has shown considerable interest in the issue. It is important to note, and the performance figures support this, that it is only really in recent weeks that performance has not been acceptable. It is not that this has been an acute problem for a considerable length of time. However, performance has not been acceptable in recent weeks.

People should contact the number on the letters they have received. I am aware that there have been problems getting through on the phone in recent weeks, and have tested it out for myself. We are putting in additional resources to allow Concentrix to focus on answering the phones and dealing with outstanding cases while additional HMRC staff resolve some of the back-office issues and some of the complexities, so that people can focus on the immediate issue.

Some more mandatory considerations are coming in, but we think there are around 2,500 cases in the system still to be dealt with at the moment. We expect more to come in because it is that time of year, after people who have not supplied additional information as they were requested to have seen their tax credits stopped. We feel that, with that additional resource, we can resolve that quickly, and that is my focus.

Photo of Bob Blackman Bob Blackman Conservative, Harrow East

Now that the position is that Concentrix is not going to deal with any new claims or cases, will my hon. Friend clarify for the House who, from HMRC or wherever, will deal with claims of errors, fraud and other problems, so that we send a strong signal to people that that will not be acceptable and that we want to see genuine claimants compensated for losing money that they need?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

I reassure my hon. Friend that it has always been the case that both Concentrix and HMRC were pursuing matters of error and fraud; it was not the case that only Concentrix was doing so. HMRC will continue to pursue error and fraud cases. In recent years the Government have put additional resource into supporting HMRC’s work on general tax avoidance and evasion, and compliance.

Photo of Frank Field Frank Field Chair, Work and Pensions Committee, Chair, Work and Pensions Committee

I thank the Minister for her statement and draw the House’s attention to how different that response was from those of the previous Government; I do not believe that we would have had today’s statement had there not been a leadership change, so I thank her for that. Will she pass on my thanks to her colleague, the Under-Secretary of State for Business, Energy and Industrial Strategy, Margot James, for the immediate action she took on the report I submitted on Hermes, whose unlawful use of self-employment HMRC has been asked to investigate?

I have two questions. The worry about this contractor is that to some people it appears to be cutting benefits first and asking questions afterwards, and there is no mechanism for a hotline for MPs to try to sort such issues out. Although I very much welcome her bringing the contract back in-house, it is the only contract that has ever been put in place that has allowed a private company to make decisions about people’s benefit levels, so might she review that?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

I thank the right hon. Gentleman for his comments on the priority given to resolving problems of this nature. It is worth reiterating that, through the contract, we have secured more than £280 million of identified savings in terms of error and fraud. There continues to be considerable fraud, particularly with regard to whether people live singularly in a household. It is important to recognise that the contract has brought important benefits to the taxpayer.

I recognise the right hon. Gentleman’s challenge on the nature of the contract. Such contracts have their place, but they must work appropriately. The contract must work to do the thing it set out to do, but it must at all times work for taxpayers and, above all, for the vulnerable. I will reflect on his wider point if I may, but I give him reassurance on that general point.

Photo of Craig Mackinlay Craig Mackinlay Conservative, South Thanet

All hon. Members will have received a deluge recently of harrowing cases of people who have had calls from and interaction with Concentrix. They were unsure at first whether the company existed and whether they had received a scam letter, which we see far too often. There has been a poor delay in opening post, and getting through on the telephone has been next to impossible. That service level is unacceptable in the public sector. Will the Minister confirm that her very strong announcement today, which is welcome, shows that the Government are committed to helping the vulnerable immediately and accurately?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

I hope we have shown that. We have important contracts across the Government with people to provide services, but clearly they need to be provided to an acceptable standard. The decision is not to renew the contract. In taking that decision, HMRC has clearly taken into account operational performance. The focus for all of us—Ministers, HMRC and individual Members acting in their constituency capacities—is to ensure that our most vulnerable constituents are supported as soon as possible to ensure that the money to which they are correctly entitled hits their bank accounts and they do not have the stress of wondering where the money will come from.

Photo of Nigel Dodds Nigel Dodds Shadow DUP Spokesperson (Reform and Constitutional Issues), Shadow DUP Spokesperson (Foreign Affairs), DUP Westminster Leader

All of us as constituency Members of Parliament can relay stories of how the service contract has worked and been deplorable, but on the jobs that will be lost—some of them are in Belfast—will the Minister tell us what contact she has had with the Northern Ireland Executive, or what contact HMRC has had with the relevant devolved Administrations or regions, about the effect on jobs? What will be done to give support to those who will lose their jobs?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

It is important to note that the decision has been taken by HMRC not to renew the contract. To that extent, the decision for a private company such as Concentrix on what it does beyond that point is clearly a matter for the company. If the right hon. Gentleman has concerns of that nature, colleagues in the territorial office and the Department for Business, Energy and Industrial Strategy will be happy to talk to him in the normal way. It is important to stress that this is not a decision to end a contract here and now, but a decision not to renew it in the spring.

Photo of David Rutley David Rutley Conservative, Macclesfield

I welcome the steps the Government have taken to protect the vulnerable in this situation. Will my hon. Friend assure the House that the lessons learned in this case will apply not only to the contract when it is retendered in May, but across Government contracts more widely?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

I hope I can give that reassurance for the future. To date, it has always been the case that, when the Government contract a supplier to provide a service, it should be provided to the right standard, and that contracts are monitored and we ensure that service levels are acceptable to Members and their constituents.

Photo of Helen Jones Helen Jones Chair, Petitions Committee, Chair, Petitions Committee

Despite what the Minister has said, I have constituents who have had their tax credits cut off with no prior notification, and who have spent up to 70 minutes on the phone trying to get through, which is a huge drain on their resources. Will she tell us whether the contract included penalties for Concentrix if it did not provide an acceptable service level or answer calls within a set time? If not, who will take the responsibility for negotiating such a flawed contract?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

Waiting 70 minutes to have a call answered is clearly not acceptable. I can imagine the distress that would cause somebody trying to get through. If you will forgive me, Mr Speaker, and if the hon. Lady will let me, I will write to her about the points she made about the contract—I do not have that detail to hand, and I need to assess what we can say given commercial confidentiality. If I can give her the answers she seeks, I will do so, but I will write to her if that is acceptable.

Photo of Robert Jenrick Robert Jenrick Conservative, Newark

The National Audit Office found that the Concentrix contract delivered savings of £500,000 in 2014-15 compared with the original estimate of £285 million. It was expected to deliver at best half the original savings planned in the contract. As we have heard, and as we have learned from our constituency postbags, there were a large number of errors in the process. What more can the Government do to improve the tendering process in future, particularly at HMRC, and to improve the managerial capability at HMRC, so that we do not have such mistakes in future?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

This is a payment-by-results contract. As I said in my response to Rebecca Long Bailey at the outset, Concentrix will not be paid when it has not acted appropriately and when it has not got a result. It is important that we get these things right and I take my hon. Friend’s point. I reassure him that HMRC, and indeed Government Ministers, will always seek to get the right contracts. Clearly, when there are lessons to be learned, we must reflect on them and ensure that they are reflected in future arrangements.

Photo of Greg Mulholland Greg Mulholland Liberal Democrat, Leeds North West

Last week in evidence to the Institute for Government, the former Work and Pensions Secretary, Mr Duncan Smith, admitted that outsourcing to the private sector was not a panacea. Surely after the Concentrix contract fiasco it is time for full review of outsourcing to private companies in the welfare system. Is it not time to look at whether outsourcing is appropriate at all or, if it is to continue, at what better civil service oversight provision is needed to ensure that this sort of thing never happens again?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

I again urge hon. Members to keep a degree of perspective. Many contracts deliver what we want. It is worth noting that the Concentrix contract delivered more than £280 million in savings to the taxpayer, which represents a sensible return on that investment. I have said what I have said about service levels—they must be acceptable and to the standard we have contracted for—and there are circumstances in which the use of a private companies offers a cost-effective way to get something that the Government might not otherwise have, which could mean flexible capacity or the capacity to do something for an uncertain period. Sometimes, the flexibility that such contracts offer makes it easier than doing something in-house. I take the hon. Gentleman’s points and will reflect on them but I do not draw the same general conclusion as he does.

Photo of Rehman Chishti Rehman Chishti Conservative, Gillingham and Rainham

I welcome the Minister’s statement and concur with the excellent point made by my right hon. Friend Sir Desmond Swayne. The Minister will know that genuine errors are made by both constituents and HMRC. Going by one’s casework and constituency surgeries, it seems that sometimes full compassion is not shown by HMRC when looking at the circumstances when a genuine error is made. Can we ensure that that is done in those difficult circumstances for those who are most vulnerable and in need?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

I have had the same experience as my hon. Friend. Only last week in a constituency surgery, I sat with a constituent who had a complex case and who was in a very difficult situation. Obviously, we can take up cases on behalf of constituents, but when constituents ring HMRC, it is important that they explain their circumstances. HMRC will make every effort to resolve the situation quickly. It is very aware of the need to get people sorted out and get money into their bank account, as appropriate, quickly, but I will re-emphasise that—as the House can imagine, I have discussed the issue in recent days. The interest in this urgent question and the points being made on both sides of the House will be seen and heard where they need to be.

Photo of Ian Murray Ian Murray Labour, Edinburgh South

A significant number of my constituents have been left financially disadvantaged as a result of the antics and processes at Concentrix. Can the Minister assure the House that, while the priority is to resolve those cases urgently, she will look seriously into fining the company and using those resources to compensate my constituents for the financial distress they have suffered?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

To reiterate what I said earlier, I will ask HMRC to advise me on the nature of the contractual arrangements. Again, it might be better if I could write to the hon. Gentleman on that.

Photo of Kevin Foster Kevin Foster Conservative, Torbay

As a constituency MP who has dealt with a number of cases, I am pleased to note the action the Government have taken. That said, as a member of the Public Accounts Committee I have also sat through numerous reports on the quality of service HMRC provides, which is at times hardly of gold standard. What reassurance does the Minister have that, with HMRC picking up some of this work, we will not see a drop-off in the standard of services elsewhere and in future arrangements?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

I do not believe that that will be the case. HMRC has been dealing with cases at the same time as Concentrix throughout the period of the contract. I have been assured that the 150 additional staff deployed with immediate effect will be focused on this. I have no reason to believe that any other services will suffer. My hon. Friend’s point is well made and will be re-emphasised to HMRC.

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Cities)

I am glad to hear that the Concentrix contract is ending but, as the Minister said, it will still be dealing with ongoing casework. Will she personally intervene to help a constituent of mine who was plunged into £1,300 of debt through the incompetence of Concentrix? It failed to process the annual review and refused to acknowledge any of my correspondence. Will she take up this case?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

Of course. If any Member wishes to write to me, I will ask HMRC to look at it as a matter of priority. The hon. Lady may not be around tomorrow morning, but there is an opportunity, if she or any other Member wants to bring a complex case, to go to the drop-in where HMRC officials will be available. If she would like to write to me, I will of course look at the case.

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

I first raised this issue last January. It has taken about eight months to get to this situation. The issue, which had been going on for weeks, related to a family who did not have any income over the Christmas period. Why does it take a BBC programme to bring Ministers to the Dispatch Box? On Monday, a member of my staff was given the run-around by HMRC and Concentrix because nobody would take responsibility. My constituents have spent hours on this. To involve the private sector in such a sensitive and humane issue does not work.

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

I am sorry to hear that the hon. Gentleman had that difficult experience. I cannot agree with his general point about there being no role for the private sector in this regard. I refer again to the amount of money that has been saved for the taxpayer. There is a lot of error and fraud in the system, and it is important that we bear down on that. We do not want money to go to people for whom it is not appropriate, in particular in relation to the nature of people’s households. Much of the fraud does rest in that area. As he highlights, this is a particularly difficult and sensitive area to investigate, but we need to continue to investigate it because the amount of fraud in the area of tax credits is considerable.

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party, Foyle

We can all share the stories of our constituents’ anguish and the frustration for our offices in dealing with this debacle, but we should remember that HMRC is itself not an innocent agent. It designed the contract. It put customer hostility and suspicion into the contract, and into the standards of performance and practice. It was, of course, HMRC that provided the names targeted by Concentrix. This has happened against a backdrop of the Government persistently running down the capacity and character of HMRC. Will some of those bigger policy misguidances also be looked at, as well as the enjoyment we are all having today in scapegoating Concentrix itself?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

I return to the answer I gave a moment ago. We need to continue to bear down on fraud in the system. There is a considerable amount of error and fraud. I am afraid it would be naive to think that all of this is error. There is fraud in the system and there is a lot of error, which the original design of tax credits makes easier. We need to continue to bear down on fraud, but clearly we need to do that in a way that does not make it difficult to assist the most vulnerable.

Photo of Sue Hayman Sue Hayman Opposition Whip (Commons)

The Minister has mentioned fraud a number of times. There is obviously fraud in the system, but I really do not see that that as an excuse for errors and failures that affect our constituents. My constituent, Sarah Hodgson, has three young children and is struggling to put food on the table. There is no excuse for incompetent contractors. I am glad the Minister talks about the redeployment of HMRC staff to support people. The HMRC office in my constituency, which employs over 200 people, is due for closure. Our nearest regional office is more than two hours’ drive away and the phone system is clearly not working: it is not helping people with their inquiries. Will she please review the closure of our local offices, so that people can keep the support and the face-to-face contact they need in these situations?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

I am sorry to hear about the case the hon. Lady mentions on behalf of her constituent. She raises a wider issue about the modernisation project that HMRC is going through. Perhaps it would be more appropriate if she wrote to me. Although the process of modernisation means that some regional offices are closing, it is important because it is fundamentally about delivering a better and more modernised service in the future for all our constituents.

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury), Shadow DUP Spokesperson (Work and Pensions), Shadow DUP Spokesperson (Education)

I trust there will be some compensation paid by the company for the ineptness in the way the contract has been handled and the extra costs that have been incurred. A lot of people today have talked about how wonderful it is that this is being brought in-house, but it was not so long ago that this House condemned HMRC for not answering more than half of the telephone calls made by constituents about tax matters. What steps has the Minister taken to ensure that, now that new cases will be brought in-house, there will not be the same problems with HMRC as there were with Concentrix?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

It is documented that at times in the past HMRC has had problems with answering its phones, but I think that of late some of the information in the public domain is rather out of date. Indeed, performance in answering phones is considerably better and has reached a very good standard in recent weeks. It is important to retain some balance. It is worth noting that Concentrix has amended about 103,000 claims following the checks it has made. I reiterate that this has been an important exercise, but clearly it needs to be done in the right way.

Photo of Julie Cooper Julie Cooper Labour, Burnley

I welcome the news from the Minister that Concentrix will not have its contract renewed, but in the meantime I have ongoing concerns on behalf of my constituents. There has been a lot of talk about what is unacceptable, with a focus on fraud. What we are talking about here today are errors that have been made and have caused tremendous suffering. We are not talking about occasional exceptional errors; we are talking about a widespread number of errors that are causing exceptional misery for some families. Let me just share with the House the story of one of my constituents, a single mother of four, whose tax credits were stopped in error. As a result, her claim has been closed down, her children can no longer access free school dinners, she cannot get free milk tokens for her baby, and, more importantly, she has been told that her claim cannot be reopened for 44 days. Will the Minister assure me that she will intervene, as a matter of urgency, to make sure that this mother can continue to feed her children?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

I am sorry to hear that the hon. Lady’s constituent has had such a difficult time. Obviously, without knowing the details of the case it is very difficult to comment across the Dispatch Box. I urge her to use the resource I have referred to throughout this urgent question to take up the case. I hope it can be resolved in that way as soon as possible. I have emphasised—HMRC is very aware of this—that speed is of the essence where people have had their tax credits erroneously stopped. She is right that there is error in the system. I reiterate the point that this is a too-complex system, which is exactly why the Government are looking to make major long-term reforms. Even the honest taxpayer can easily fall into error with a system that was so complex in its design from the start.

Photo of Tasmina Ahmed-Sheikh Tasmina Ahmed-Sheikh Shadow SNP Westminster Group Leader (Trade and Investment)

As we sit here, families up and down the country have been required to rely on charity and food banks. To make ends meet, as a result of what can be described only as frankly ridiculous decisions made by Concentrix, our constituents find themselves in a position not of their own making. To this end and given that so many are living a day-to-day existence, will the Minister confirm just how quickly people can expect to be paid the sums to which they are rightfully entitled?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

It is really important that we get the facts of the case correct and quickly. At the point that that is done—it might be during the course of just one phone call—I am assured that money should be placed into people’s accounts in a matter of no more than four working days. That is what I expect to see. It is a matter of days and it certainly should not be weeks. We need to establish the facts in each instance. It is worth saying again—for the sake of the House having some sense of perspective on this issue—that last year only 1.6% of customers asked for a review of the decision, following a check. Given that a large number of people are being checked, that is quite a large number, but it would be wrong to think that this was a huge proportion of the cases in question. It is important to get things right and, as I say, we look to pay people within days—as soon as the facts of the case have been established.

Photo of Diana R. Johnson Diana R. Johnson Labour, Kingston upon Hull North

The Minister says that HMRC is supporting Concentrix in performing its contract up until it ends next year. What is the cost to the public purse of that support, and is it recoverable from Concentrix?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

It has always been the case, as we would expect, that managers within HMRC have worked with Concentrix throughout. I do not anticipate that enormous additional costs will be involved. There has always been a relationship between the two because there is some overlap in the work being done. I would expect that to continue as we work towards the end of the contract.

Photo of Alan Brown Alan Brown Scottish National Party, Kilmarnock and Loudoun

The Minister is currently engaged in crisis management, but unless she sees the bigger picture, crisis management itself is not going to be good enough. In her opening statement, she said that Concentrix was not allowed to phish, but it clearly has been phishing. One of my constituents got a phishing letter not only saying that they were going to stop the tax credits, but demanding £10,000 in back payments. It is quite clear that investigation is needed—and soon. Any such investigation needs to look not only at the contract terms, the audit process and Concentrix’s behaviour, but at what is the true resource requirement for dealing with the tax credits issues. Unless the Minister can confirm such an investigation and review, we will be back here in a couple of years’ time.

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

HMRC has data analytics and operational experience to deliver the kind of savings we are looking for in reducing error and fraud. Practical measures such as simplifying the tax credit system, better monitoring of changes of income through real-time information and improved detection of fraud will obviously go forward. They are all important parts of making sure that we improve performance. It is worth noting again that hundreds of millions of pounds to the taxpayer have been saved by reducing error and fraud. We want to make it harder for people to make errors in the future.

Photo of Alison McGovern Alison McGovern Labour, Wirral South

As long as I have represented them, people in the Wirral have been treated with disrespect and indignity by HMRC. This is only the worst of a long series of cases. Let me ask the Minister one simple question: when did she first meet Concentrix to raise our concerns with them?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

I have been a Minister in this Department since mid-July. I have not met Concentrix because I have not been the Minister for that long. Clearly, however, my predecessor colleagues have done so. I have been working with HMRC on regular monitoring. Given the interest from colleagues of all parties in recent weeks, I have been getting daily updates from HMRC on terms of performance. In the relatively short time I have been in my post, particularly in view of the summer recess, I have not had a chance to meet Concentrix. On the hon. Lady’s general point, I am sure that HMRC will be disappointed to hear it, but I am also sure that it will want to reflect on her words.

Photo of Carol Monaghan Carol Monaghan Shadow SNP Westminster Group Leader (Public Services and Education)

One issue reported by my constituents is the requirement to send all the documentation by registered post, which costs over £13—money that they can ill afford when they are living on the breadline. During the eight months in which Concentrix will continue to have this contract, will the Minister look urgently at alternative methods of providing documentation?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

I will certainly ask that question, but I cannot give any assurance that it will be possible to alter the situation during the time that the contract has left to run. The hon. Lady highlights an important point about where we go in the future with these sorts of systems. It further highlights the fact that the more we can make these things digital and make it easier for people to get right, the more likely we are to avoid these sorts of unhappy situations.

Photo of Gavin Robinson Gavin Robinson Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Home Affairs), Shadow DUP Spokesperson (Human Rights)

The Financial Secretary should know that I tabled five questions on this issue on Monday, and that I am well alive to the issues that many colleagues have raised this afternoon. With 1,800 people employed by Concentrix in Belfast and with Concentrix redeveloping on to one location in the city, will the Financial Secretary reflect on how appalling it was that members of staff—many of them my constituents—found out about this news last night only by a tweet from the BBC rather than through any communication from Concentrix or indeed any statement to this House?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

As I have said a number of times, the contract is not going to be renewed; it has not been terminated. To that extent, consideration of whether any contract is renewed is something that will take place in the normal course of events. The hon. Gentleman provides me with an opportunity to place on record my thanks to the many Concentrix staff who are working hard at their jobs and trying to resolve problems. At the same time as we shine a light on areas where performance is unacceptable, it is really important to take the chance to reflect on the fact that many people are working hard to do their jobs as well as possible to provide a good level of service. Indeed, many people are succeeding in that regard.

Photo of Owen Thompson Owen Thompson SNP Whip

I know the Minister says that she sees no need for an inquiry, but I and many colleagues in the Chamber today—and certainly many of our constituents—very much disagree with that position. My question is: how can we learn the lessons to ensure that the practices employed by Concentrix never come to light again if we do not look into the practices carried out by Concentrix through some form of investigation or inquiry?

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

In the normal course of events, we would always look to how things should be arranged in the future after reflecting on what we can learn from things that have already happened. That would happen through a normal process of review and consideration. We shall have to agree to differ on the issue of whether an inquiry is needed.

Photo of Christina Rees Christina Rees Labour, Neath

I have been contacted by many distressed women in my Neath constituency about how awful Concentrix really is. Some Concentrix advisers have suggested to mums, who are desperately trying to renew their tax credits, to get payday loans to feed their children while their claims are being processed. A group has been formed, called “Concentrix Mums”, whose more than 5,000 members can share their horror stories. Let me provide just a couple.

Photo of Christina Rees Christina Rees Labour, Neath

I hope not. Does it involve shoehorning? One mum had not eaten for three days so that she could feed her children. This is sickening: it should be stopped and it should have been stopped a long time ago.

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

I am aware of the Facebook group that the hon. Lady mentions, and I am also aware of some of the cases that have been documented there. To end where I began, that is exactly why we are deploying additional resources to make sure that we can deal with the most difficult cases for the most vulnerable people as quickly as possible. That will be my focus and that of HMRC in the coming days.