The Work and Pensions Committee has published HMRC’s response to its report on Concentrix. The Committee was highly critical of both HMRC and its contractor for failings that left thousands of people, many of whom were vulnerable, without benefits to which they were entitled for weeks on end.
The Government has accepted many of the Committee’s recommendations:
- HMRC has agreed to undertake a review of cases where Concentrix amended or terminated a benefit award but an appeal was not requested by the claimant. Of the 59,000 claimants whose benefits were stopped or cut by Concentrix, 36,000 requested an appeal called a 'Mandatory Reconsideration'. 87% of those were upheld in favour of the claimant. The Committee was concerned that the complex and demanding Mandatory Reconsideration procedure, which HMRC and Concentrix accepted as "a routine feature of the process" was daunting for claimants and there was "no doubt" that some people who wrongly had their tax credit stopped had not appealed. HMRC plans to complete this new commitment by March 2017.
- The Government has agreed to publicise better the availability of hardship payments. It acknowledged that there has been "an absence" of such guidance on gov.uk and will publish new content in February 2017.
- HMRC has committed to detailing the reasons it suspects fraud and error in letters to claimants. One of the Committee’s main concerns was that Concentrix did not inform tax credit claimants of the nature of suspicions against them, with claimants left not knowing what they had to prove or disprove, or how. For example, claimants tasked with proving they were single were not told the identity of the person with whom they were suspected of cohabiting. In some cases the person was a former landlord or a dead relative - potentially easily resolved.
- HMRC has agreed to extend any future deadline for the submission of supporting information by claimants to be extended if telephone handling performance again falls below acceptable levels. It has also begun work on enabling claimants to supply information electronically. The Committee found that claimants were "unfairly disadvantaged by the failure of the telephone system". One single mother told the Committee she had spent 19 hours and 57 minutes on the phone trying to resolve her tax credit problems.
- HMRC is taking independent advice on the next annual tax credit renewal process and will write the Committee in March 2017 with its proposals for improvements before proceeding. It intended to "shift the focus of compliance activity to a greater emphasis on education and preventing error and fraud at the point of entry to the system". A longstanding criticism of HMRC’s approach to fraud and error is its focus on detection rather than prevention, with the consequent costs and hardship to claimants this causes.
Rt Hon Frank Field MP, Chair of the Work and Pensions Committee, said:
"The Committee is very pleased that HMRC has accepted our recommendations, which is testament to the work of Parliament on this issue. HMRC was right to fire its contractor, but many of the processes used by Concentrix were the same as those used by HMRC itself.
In particular, the Committee welcomes the review of cases where claimants had their tax credits stopped but did not submit a formal appeal. For many claimants, particularly those who were unwell, lacked self-confidence or had caring responsibilities, the document-heavy process of challenging a wrong decision by Concentrix was surely prohibitively daunting. The real answer is of course to root out fraud and error at entry to the system rather than stopping benefits in payment as first resort."