HM Revenue and Customs has been accused of "borrowing from Peter to pay Paul" by deploying its own staff to answer queries about its shelved tax credits contract with outsourcing giant Concentrix.
The firm was given a three year payment-by-results contract with the tax authority in May 2014, and was tasked with identifying around two million tax credit cases that HMRC itself forecast would contain fraud or error.
However, HMRC announced last month that it would not be be renewing Concentrix's contract when it expires in May of next year after public criticism of the firm's treatment of claimants. The tax authority said 150 of its own staff would be redeployed "so that customers can get through to advisers and resolve any issues about their claim".
HM Revenue & Customs gets flak for Concentrix job losses
HMRC chief Jon Thompson confirms US firm Concentrix won't have tax credits contract renewed
But the Public and Commercial Services (PCS) union has now written to HMRC chief executive Jon Thompson, warning that Concentrix's recent decision to let go of temporary staff working on the contract leaves HMRC facing the loss of "a pool of staff experienced in tax credits work", and urging the tax authority to ensure it has enough staff to handle the caseload.
PCS assistant group secretary Collette Smith writes: "Clearly any delay in action being taken by the department to address for the long-term the impact of the non-renewal of contract, is likely to mean the pool of knowledge within Concentrix is likely to be subject to even greater loss."
Smith says the decision not to renew the Concentrix contract adds to a list of "failed privatised undertakings" at HMRC, and says the fraud and error work should now be "brought in-house".
"However, what is of equal importance is that the necessary staffing resource is made available to ensure that the work can be properly undertaken by HMRC without negatively impacting elsewhere on the department," she adds.
The union representative argues that, with some HMRC staff now asked to work Concentrix on cases, "the work they normally undertake will be building up".
"Effectively you are ‘borrowing from Peter to pay Paul’, and simply creating backlogs elsewhere," she adds.
The union has asked for an "immediate and substantive response" from the HMRC chief.
The tax authority has already defended its decision not to renew the Concentrix contract, saying it was “vital” to ensure tax credit customers had a high level of service.
A spokesperson for Concentrix meanwhile told CSW last week that it was "doing everything possible to minimise any impact" as a result of HMRC's decision not to renew the contract.
“We are engaged with HMRC to fully understand the implications of this announcement and in the meantime we are exploring all options for our staff within Concentrix," the company said. "Concentrix remains committed to Belfast as a base for our European operations."