A giant US outsourcing company accused of wrongly stopping the tax credits of hundreds of people will not have its contract renewed, HM Revenue and Customs announced on Tuesday night.
Concentrix was awarded the contract to check entitlement to benefits entitlement in 2014, but has been accused of leaving claimants struggling to pay for food and basic household needs by incorrectly stopping their payments.
Earlier on Tuesday, BuzzFeed News revealed how one single parent from Stockport had her tax credits stopped six weeks ago by Concentrix after the company mistakenly identified her daughter as her partner and concluded she was in an undisclosed relationship.
"There's hundreds of girls in my position," Tricia Williamson, 49, said. "There's no understanding, no empathy. It feels like they've been given a quota and they just don't care."
In a statement, HMRC chief executive Jon Thompson said: “We want to reassure customers who have had their tax credits stopped that we will prioritise their cases, and make sure that they are processed as quickly as possible.
“While it’s right that we ensure that tax credits customers only receive the money to which they’re entitled, it is vital that those customers have a high level of service.
“That’s why we have decided not to extend our contract with Concentrix and HMRC is redeploying 150 staff so that customers can get through to advisers and resolve any issues about their claim.”
But HMRC said the company will be allowed to see out its existing contract, which runs until May 2017.
Concentrix issued an angry response to the announcement, insisting that it was proud of saving £300 million of public money and suggesting any problems were HMRC's fault.
It said: "We have operated professionally at all times and within the guidance set by HMRC. The HMRC statement not to renew the contract attacks our professional credibility, and the commitment of our staff who have performed determinedly, despite the issues with HMRC policies and procedures."
HMRC's move follows a campaign by MPs, led by Labour's Louise Haigh, who had called on the government to bring services back in-house. Concentrix had missed its performance targets on 120 occasions in the last 11 months, according to a parliamentary answer to Haigh.
“Concentrix are operating with callous indifference to the thousands of people they are plunging into hardship," the MP for Sheffield Heeley told BuzzFeed News before the HMRC announcement.
“This is a failing contract and a firm clearly not fit to conduct checks of this kind. Arbitrary cancellation of payments without proof, phantom letters which recipients never receive, accusations that they are in relationships with people they have never heard of.
"Single parents having to skip meals or keep their kids back from school because they cannot afford the uniform because their tax credits have been wrongly cancelled. These aren’t one-off, exceptional cases – they are indicative of a company on a payment-by-results contract doing everything they can to rake in profit on the backs of hard working single parents and families."
BuzzFeed News spoke to several families whose tax credits were stopped by Concentrix. They accused the company of arbitrarily stopping payments, failing to accept evidence of hardship, slow service, and rudeness.
Royal Mail worker Tricia Williamson's credits were stopped after Concentrix identified her 31-year-old daughter, with whom she lives, as her partner.
Even though Williamson provided documentary evidence to prove her case, Concentrix nevertheless stopped her tax credits on 1 August and she has now gone six weeks without money.
"I phone every day," Williamson said. "My eldest daughter has had to buy my youngest her school uniform for this year. I'm nearly 50, I shouldn't be living off my kids."
She said when she first pointed out the error to Concentrix, she was told to send evidence. "They said that would be fine," Williamson told BuzzFeed News. "They said to send a year of bank statements, and I sent that plus her birth certificate, but they still stopped my tax credits on 1 August.
"My daughter's been stuck at home all through the holiday – there's no money for her to do anything with her friends. A Concentrix adviser said I should go to a food bank. I don't need food, though – I need money for school buses and uniforms."
A second person who had her tax credits stopped by Concentrix asked not to be named as she was worried it might affect her payments being resumed.
The 39-year-old mother of seven told BuzzFeed News her payments were stopped, and that she was initially told this was over an undisclosed relationship – with the woman who was the previous tenant in her rented home, who she had never met, and who she said she had since learned had actually been deported last year.
"It's been an absolute nightmare," she said. "It's the most ignorant, obnoxious company I've ever dealt with."
She said the tax credits for her five children at home were the majority of her income, and that she had only coped since their stoppage by living off the disability living allowance she receives for her 11-year-old child.
The stopped payments have been a source of worry while working out how to buy school uniforms, as well as travel to college for her eldest son.
"They shouldn't be putting families in the position where their kids are going without," she said. "People are panicking because Christmas is coming. What will they do if they're still stopped then?"
The company won the contract to help HMRC reduce fraud and error in tax credit payments in May 2014, and was previously criticised for saving the taxpayer just £500,000 in the contract's first year of operation, against a projected saving of £285 million.
Relatively unusually, the project brief for Concentrix contains an explicit requirement to try to "maximise revenue flows", fuelling concerns about the company being overly quick to cut off payments, especially as it is paid by results – though a spokesman stressed it only receives funds if a cut-off was found not to be in error.
Before the HMRC announcement, a spokesman for Concentrix told BuzzFeed News the company contacts tax credit recipients well in advance of cutting off payments, and stressed the company is only paid for decisions which were correct.
"When there is reason to believe someone's award may be incorrect we, or HMRC, will write to them explaining the information we require in order to check their claim and that their tax credits may be reduced or stopped if they fail to respond within the 30 days," he said.
"If we don't hear anything after 30 days, payments are stopped automatically to protect the claimant building up an overpayment, which they would have to pay back at a later date."
Asked whether the company had heard of any concerns from HMRC, he added:
"Concentrix works very closely with HMRC and within its guidelines at all times. Management meet regularly with HMRC to discuss all aspects of our work to ensure that we are providing the best possible service to the UK taxpayer.
"HMRC scrutinise the cases Concentrix change and we are paid based on the accuracy and quality of our results as well as the level of customer service we provide. To be clear, Concentrix are not paid for decisions which are incorrect."
BuzzFeed News understands Concentrix disputes HMRC's count of 120 occasions since October 2011 when the company missed performance indicators. By the company's count, the total is 49.
James Ball is a special correspondent for BuzzFeed News and is based in London. PGP: here
Contact James Ball at James.Ball@buzzfeed.com.
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