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Summary

On 6 May 2014 SYNNEX-Concentrix UK Limited – more commonly known as Concentrix – signed a contract with HM Revenue and Customs aimed at providing “additional capacity to review and correct tax credit claims that are potentially based on incorrect information.”   The “Error and Fraud Adding Capacity” (EFAC) contract runs until 5 May 2017.  A key activity to be undertaken by Concentrix was “undeclared partner” investigations – investigations into whether a person claiming tax credits as a single person is in fact living with another person.  Other forms of fraud and error would however be investigated by Concentrix.  The contract also delegated extensive decision-making powers to Concentrix, including the processing of tax credits “Mandatory Reconsiderations.”  Total savings of £1 billion were expected to be made over the three years of the contract, which was estimated to be worth up to £75 million for Concentrix (although the contract used a “payment by results” model).

Welfare rights groups and others have voiced serious concerns about the activities of Concentrix and their impact on tax credit claimants, particularly in relation to undisclosed partner interventions. Recurring complaints include claimants having their tax credit awards stopped – sometimes with little or no warning – on the basis of incorrect information, forcing them to borrow money from friends and family or to have recourse to food bank in order to feed their families; claimants being accused of cohabiting with individuals unconnected to them, such as previous tenants of their property or, in some high profile cases, unrelated people now deceased.  Claimants have also experienced difficulties contacting Concentrix by phone, despite repeated attempts, and long and expensive waits to get through to Concentrix advisers.

In a statement to the House of Commons on 14 September, the Financial Secretary to the Treasury, Jane Ellison, announced that in light of evidence that the contractor’s performance had in recent weeks “not been acceptable”, HMRC had decided not to renew Concentrix’s contract beyond May 2017, would no longer be passing new cases to it, and had redeployed Departmental staff with immediate effect to help resolve outstanding issues with tax credit claims.  Concentrix responded by saying that it had operated professionally at all times and that the announcement “attacks our professional credibility, and the commitment of our staff.”  It also pointed out that it had secured nearly £300 million savings from fraud and error for taxpayers.

Both the Work and Pensions Committee and the Treasury Committee are looking into the involvement of Concentrix in tax credits administration. The National Audit Office has launched an investigation which will review the performance of Concentrix and how HMRC has managed the contract, including HMRC’s decision not to extend the contract.

In an oral evidence session on 13 October the Work and Pensions Committee heard evidence from tax credit claimants, from representatives of Concentrix, and from HMRC officials.  From the claimants, the Committee heard examples of “appalling customer service” and the consequences for the individuals concerned and their families.  Concentrix told the Committee that, as part of the current “campaign” which started in April 2016, HMRC had supplied it with 1.5 million claimant records flagged up as “high risk”, which Concentrix subsequently whittled down to 324,000 cases for further investigation using a process known as “High Risk Renewal.”  Of the 324,000 claimants sent letters by Concentrix, 45,000 had their tax credits stopped and 14,813 had requested a “Mandatory Reconsideration” of the decision.  Concentrix told the Committee that it had followed practices and procedures agreed with HMRC, and was surprised by the Government’s decision that its contract would not be renewed, which it found out about only an hour before the announcement was made.  HMRC officials said that they had acted swiftly and decisively in light of Concentrix’s customer services “failure”, namely its failure to ensure sufficient call centre staff were in place to meet demand.  The Committee were also told that 73% of tax credit Mandatory Reconsiderations (or 90-95% according to Concentrix) were decided in the claimant’s favour.

The Work and Pensions Committee is now seeking urgent clarification about how the performance of Concentrix was monitored by HMRC; Concentrix’s staffing levels and staff training; how HMRC intends to compensate claimants, ensure they are not further disadvantaged, and review decisions taken by Concentrix; and is also seeking assurances that Concentrix will not be compensated for HMRC’s decision to bring functions back in-house.


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