The government still has questions to answer on the handling of HM Revenue & Customs’ ill-fated contract with Concentrix, Labour’s Louise Haigh has said.
The former shadow Cabinet Office minister — now shadowing the digital economy brief — welcomed HMRC chief executive Jon Thompson’s confirmation this week that the tax collection agency was not looking to find a new private sector partner for its tax credit fraud checks after the Concentrix contract ends.
But Haigh said she had been told that HMRC had agreed to alterations to Concentrix’s original payment-by-results contract, worth up to £75m, because the firm was not making sufficient profit.
Concentrix row: HMRC chief Jon Thompson hints at early end to troubled tax credits contract
HMRC to bring Concentrix staff in-house after tax credit "fiasco"
HMRC’s Jon Thompson: Concentrix debacle calls private sector incentive payments into question
“There remain many unanswered questions about the behaviour of the government as well as Concentrix,” she said.
“If private contractors are allowed to re-write their contract simply because they aren’t making enough profit from the original deal, that is absolutely scandalous and ministers need to come clean.”
HMRC chief Thompson announced last month that Concentrix would not get its claim checking contract renewed following a call centre meltdown over the summer that saw thousands of claimants unable to query the suspension of their payments.
Yesterday Thompson told MPs on the Treasury Select Committee that HMRC was in negotiations to terminate the Concentrix contract by mutual agreement ahead of its scheduled May 2017 finish date.
After telling previous select committee sessions that the fraud checking work was under review and would not necessarily be subject to a new tender, Thompson yesterday confirmed HMRC would not be looking for third-party help with tax credits “in any way”.
Haigh said the news would be “met with relief” by “hundreds of thousands of tax credit recipients who have been ruthlessly and wrongly pursued by Concentrix” over the duration of its contract.
“At last the government have recognised the serious errors in judgement they made in structuring this contract; it is now time that the DWP urgently recognised that private-sector involvement has failed the taxpayer, failed individuals and ruined lives,” she said. “Never again should tax credit recipients have to deal with the private sector.”
Thompson told the Treasury Select Committee this week that Concentrix was not responsible for all of the problems with the tax credit system, which he said was “deeply flawed”.
However, he defended the government’s right to check recipients’ entitlements. Thompson has appeared before MPs on three different select committees to answer questions on Concentrix in recent weeks. He has repeatedly said Concentrix's performance plummeted from 90% of calls being answered within an acceptable timeframe to fewer than 10% because the firm had not rostered enough staff to deal with call levels.
Haigh said "whistleblowers" had told her that just one third of the staff required to deal with Concentrix's anticipated workload had been available to handle calls during the key weeks in August and September when problems peaked.
A consultation is currently underway on the transfer of Concentrix staff working on the HMRC contract to the tax agency.