HM Revenue & Customs has confirmed it plans to bring private sector staff working on its tax credits contract back in-house after major customer service failures over the summer.
Chief executive Jon Thompson last month announced that US outsourcing firm Concentrix would not have its payment-by-results contract to tackle fraudulent or wrong payments renewed because of its failure to deal with phone calls from thousands of customers whose payments were stopped.
Now it has emerged that HMRC is looking to bring the contract, valued at up to £75 million, back in-house before its formal termination date and plans to take on the full-time staff working on it too.
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In a statement, HMRC said: “As the work previously carried out by Concentrix moves back to HMRC this means, under the protection of employment regulations, Concentrix staff carrying out the work assigned to the HMRC contract will automatically transfer to HMRC.
“Those people moving to HMRC will be supported through further training, building on the improvements already delivered to the service we provide to our tax credits customers.”
HMRC said it was unable to give an indication of staff numbers likely to transfer, but stressed there would be no compulsory redundancies as a result of the move.
Civil Service World understands there were 300-400 permanent Concentrix staff working on the contract, separate to the temporary workers on fixed-term contracts. All of the Concentrix-contract staff are based in Belfast.
A spokesman for Concentrix said discussions were now under way with staff over their move to HMRC.
“This will provide permanent employment, offering job security to them well beyond the scheduled expiry of the contract in May 2017,” he said. “We do not expect any forced redundancies as a result of this transfer.”
Civil Service World understands a briefing given to Concentrix staff working on the contract indicated a timescale of five to six weeks for the transfer to HMRC.
Last week, HMRC chief Jon Thompson told MPs on the Work and Pensions Select Committee he believed the Concentrix contract raised important questions over the extent to which payment-by-results could be successfully employed in public-service delivery.
Concentrix had been taxed with identifying around 2 million tax-credit cases HMRC believed had been fraudulent. MPs heard last week that some 45,000 customers had seen their tax credits stopped during the period when problems peaked, and that more than 14,000 had demanded a mandatory reconsideration of their case.
The session heard that although Concentrix was supposed to deal with more than 90% of customer phone calls within a stipulated timeframe, but its actual performance fell to consistently below 10%.
HMRC subsequently stopped referring new cases to Concentrix, and drafted in its own staff to help deal with the backlog – a process which involved taking back some 200,000 incomplete cases.
PCS general secretary Mark Serwotka said the union was “delighted” that HMRC had now decided to bring its tax credit checks back in house, and would be pushing for the transferring Concentrix staff to be employed on the same terms and conditions as current HMRC staff.
“Sadly, this could all have been avoided,” he said, in relation to the contract problems. “The fiasco is further evidence it is a false economy to hive off important public services.”
Rebecca Long-Bailey, Labour’s shadow chief secretary to the Treasury, said the government still had questions to answer about how the Concentrix “mess” came about in the first place.
“Labour will be holding a debate in parliament next week calling for an immediate investigation into the government’s handling of the contract and for urgent action to compensate families who have unjustly had their tax credits stripped away,” she said.