Concentrix boss defends tax credits firm over benefits problems

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A boss at Concentrix has told MPs the firm was hit with significantly higher work volumes than expected as he was quizzed over a tax credits debacle which saw some claimants being wrongly stripped of their benefits.

Philip Cassidy, senior vice president at Concentrix, said he "absolutely" did not accept that the failure of customer service was solely down to the business services firm.

Concentrix was brought in by HM Revenue and Customs (HMRC) to cut fraud and error in the benefit system, but there were complaints that claimants wrongly had their benefits cut and people were unable to get through on the phones.

People struggled to get through on the phones from mid-August 2016 and HMRC later stepped in with extra staff.

Mr Cassidy told the Public Accounts Committee (PAC): "There was a plan with HMRC and we staffed to that plan, but we received significantly more volume... and we handled significantly more volume." 

The National Audit Office (NAO) previously found that during the life of the contract, between November 2014 and its early termination in November 2016, there were 108,000 cases where claimants' tax credits were adjusted or terminated.

But almost a third of those decisions were subsequently overturned following a mandatory reconsideration.

By mid-December 2016, HMRC had paid a total of £86,815 in compensation payments to claimants handled by Concentrix, including nearly £68,000 for the worry and distress caused.

The planned three-year deal had been estimated to save £1 billion by reducing fraud and error but only delivered an estimated £193 million of that sum.

HMRC's chief executive Jon Thompson has previously said people claiming tax credits will not have to deal with an outside company in future.

Mr Thompson, who also appeared before the PAC alongside Mr Cassidy, said a wide range of factors came together in August, including Concentrix not sticking to their plan for clearing cases.

Asked if the balance between focusing on savings and thinking about claimants had been got wrong, Mr Thompson said: "That is exactly why I have my doubt about whether a full 'payments by results' methodology could work."

He said that while "that's not to doubt in any way the integrity of Concentrix", there could be an incentive framework "which might not be appropriately balanced".

Mr Cassidy was also asked if the private sector can be engaged in this type of work - and replied: "We've done these sorts of contracts before and very successfully."

Mr Cassidy told the committee: "The only ability to add headcount on at that period in August was really with trained people, because it would have taken us six to eight weeks to get people up and running when that volume hit in August.

"And the only people that could have done that were HMRC. And that didn't come until after the crisis had really expired."