Concentrix and tax credits inquiry

Concentrix were contracted by HM Revenue and Customs (HMRC) in May 2014 to provide additional capacity and expertise to check for possible fraud and error in tax credit claims and, if appropriate, reduce or suspend those benefits. This was the first time a private company had been delegated such a degree of decision making responsibility for UK benefit claims. In September 2016 HMRC announced they would not be renewing the contract, took much of the work in house and extended their MPs’ hotline. HMRC have since processed the majority of appeals against Concentrix decisions. In November 2016 they announced the existing contract had been terminated. We commend that decision.

Vulnerable people lost benefits to which they were entitled through no fault of their own. Some have been put through traumatic experiences as a consequence of avoidable failures.

Customer service failures

HMRC gave Concentrix 1.5 million tax credit claims in an April-August 2016 review cycle known as High Risk Renewal (HRR16). Under the terms of that work, Concentrix could write to claimants asking for information to demonstrate that they were entitled to tax credits. They wrote to 324,000 people. Those claimants had 30 days to provide information to prove their entitlement or lose their tax credits. We heard evidence of gross failings of customer service:

• some letters were not received by claimants and the first some claimants knew they had lost their benefits was when they checked their bank accounts; • the systems used to process evidence provided by claimants were at best slow and at worst unreliable; and • Concentrix phone banks completely collapsed in August 2016 to the point that some claimants called tens of times and waited hours to speak to advisers.

These were failings of Concentrix; but they were also failings of HMRC. HMRC approved Concentrix’s plans; took three weeks to escalate the problems to senior staff; and added to their contractor’s workload by sending out 45,000 additional termination letters.

Decision making failures

Tax credit claimants seeking to ensure continued eligibility for tax credits were faced with a decision making system stacked against them:

• the merest “hint” that a claim may contain more than “zero risk” of fraud or error was enough to trigger a compliance check; and • claimants who did not or could not reply were treated as guilty until proven innocent but, in many cases involving single person claims, were not told the basis of suspicions against them and were tasked with proving the negative that they were not in a relationship with another person.