HMRC confirms early end to Concentrix tax credits contract

HMRC says Concentrix staff moving in-house are being given fresh training, as it confirms earlier-than-planned end to controversial fraud and error deal

By Matt Foster

14 Nov 2016

HM Revenue and Customs has confirmed that it is bringing an early end to its tax credits fraud and error contract with US outsourcing firm Concentrix, after a collapse in customer service levels over the summer.

HMRC's chief executive Jon Thompson has already announced that the tax authority will not be not be renewing its payment-by-results deal — set for expiry in May 2017 — with Concentrix, after what he called a “fundamental failure of basic customer service”. The firm has also faced strong criticism from MPs, after being accused of incorrectly stopping the tax credits of hundreds of clamaints.

Thompson said last month that the tax authority was "in the late stages" of "a legal conversation about how this contract essentially finishes", and HMRC has now confirmed that both sides have agreed an early end to the deal.

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In a message to HMRC staff, seen by CSW, director general for transformation Nick Lodge said HMRC and Concentrix had "worked together" to bring existing tax credits work in-house. And he praised the "hard work" of HMRC officials which he said meant it had been "able to work through these cases quickly and provide clarity and certainty to customers".

"Meanwhile, we thought it would be appropriate to look at the position of the contract and, following further discussions with Concentrix, we felt we could better serve our customers by ending the contract early, rather than continuing it through to the scheduled expiry in May 2017," he said.

Lodge confirmed that the tax authority had now transferred "around 250" Concentrix staff in-house, and said the former private sector staff were "working with experienced teams and managers to help them fit into HMRC" at the agency's Belfast sites.

"Overall, the agreement to end this contract early is the best outcome for HMRC, tax credits customers and for the taxpayer, allowing us to continue to bear down on error and fraud, and to provide the levels of service our customers expect", Lodge added.

In a statement issued to the press, Thompson meanwhile said: "HMRC’s dedicated staff have cleared all of the cases transferred from Concentrix while striking the right balance in both providing the standards of service that customers rightly expect and bearing down on error and fraud in the tax credits system.

“This is the right outcome for customers and for the taxpayer. I’m also pleased to receive 250 Concentrix staff, who will help us to deliver our priorities, offering job security to them well beyond the scheduled expiry of the contract in May 2017.”

HMRC said all 181,000 cases it had taken back from Concentrix had now been dealt with, and said staff moving over from the private provider had "received further training and support to help HMRC strike the right balance in ensuring good customer service and bearing down on error and fraud in the tax credits system".

The National Audit Office spending watchdog announced last month that it had launched "a factual investigation" into the performance of the contract, with its findings set to be published early next year. MPs on the work and pensions committee are also part-way through their own inquiry into the affair.

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