Hackney Community Law Centre and the Child Poverty Action Group have spoken out following a damning report on a botched outsourcing plan that one local MP says resulted in “appalling” consequences for local people.
HM Revenue and Customs (HMRC) ended its deal with contractor Concentrix in November last year following a series of problems with the arrangement which ended up saving the government less than a fifth of the £1 billion it had originally been envisaged it would.
Concentrix was meant to help cut fraud and error in the system, but in numerous cases it wrongly adjusted or terminated claimants’ tax credits, leading to untold stress, anxiety and hardship.
As of mid-December 2016 HMRC had paid out compensation totalling almost £87,000 to claimants who suffered worry and distress as a result of the company’s bungling, according to the National Audit Office (NAO).
Today Marcin Brajta, a welfare case officer at Hackney Community Law Centre, told the Hackney Citizen how he and colleagues had on one occasion fought for an hour and a half on the phone trying to obtain clarification on behalf of a client who risked having her tax credits wiped.
Cancellation or adjustments can be backdated leading to overpayments and a big bill to be settled with the taxman, meaning “quite a stressful situation” for those on the receiving end, Brajta said.
“We’ve had a few cases from our local perspective,” he said. “From our point of view, the most difficult, when Concentrix was involved, was finding out who was dealing with that case. On one occasion we had to call the HMRC helpline, then another helpline, then Concentrix – three phone calls just to find out who was dealing with that one case.”
He said law centre workers were disconnected twice by Concentrix officers when trying to find out information about vulnerable claimants’ cases.
Alison Garnham, chief executive of the Child Poverty Action Group, said: “Behind the NAO’s damning headline findings there were thousands of families who went through misery because their tax credits were stopped – often erroneously – and parents’ phone calls went unanswered.
“Our joint research with Oxfam, the Church of England and Trussell Trust found poor administration of benefits is a key driver of food bank use.
“So it’s crucial now, as universal credit rolls out, that the lessons from the Concentrix experience are taken on board at the Department for Work and Pensions. The department’s administration must be sharper and fit for purpose – because delayed benefits, inadequate staffing and high error rates can result in children having to live without the basics, like regular meals or a warm enough bedroom.”
Public Accounts Committee chairwoman Meg Hillier, who is also a Hackney MP, said the contract with Concentrix had been “a venture with appalling human consequences”.
She said: “We will be examining the NAO’s findings closely and holding senior officials from HMRC and Concentrix to account on the issues highlighted when we take evidence from them on January 25.”
HMRC said it was committed to paying tax credit claimants “all the money to which they are entitled, efficiently and on time” and it terminated the Concentrix deal “when it became clear it was not delivering the quality of service we expect for our customers”.
A spokesman said: ” We apologise to all those who did not receive the standard of service that they should have.
“The vast majority of people who asked to have Concentrix’s decision reviewed have now had their payments reinstated where that decision was wrong.”
A spokesman for Concentrix said: “We welcomed the opportunity to engage with the NAO in its inquiry.
“This was a hugely complex contract and programme, and as the report highlights, a number of issues emerged at the outset which laid the foundations for the challenges experienced throughout, particularly last year.
“We look forward to discussing the report with the Public Accounts Committee in order to ensure all lessons can be learned.”