MPs criticise tax credit benefit cuts

A group of MPs have raised issue with a decision by HM Revenue and Customs and contractor Concentrix which involved plunging tax credit claimants into ‘humiliating hardship and debt’.

The Work and Pensions Committee found that 90 per cent of moves to remove benefits were overturned on first appeal and condemned HMRC and Concentrix for ‘gross failure of customer service’.

The report cited that in many cases people lost benefits for months and were forced to borrow money and use food banks to survive

Frank Field, committee chairman, said: "The committee was horrified to learn of the 'cut first, think later' approach that was deployed by Concentrix. Our horror was compounded by the company's - and HMRC's - apparent celebration of its 'strike rate' in cutting families' tax credits.

"The damage caused to families' living standards by this 'strike rate' is still being felt by my constituents needing to rely on food banks while their claims are reinstated.

"Although the committee welcomes HMRC's decision to bring in-house its tax credit compliance functions, we are clear that this will not automatically deliver a better service.

"Nor are those families driven into debt going to be rescued from the plight into which this sorry episode plunged them."

An HMRC spokesman said: "We apologise to all those who were let down by our contractor.

"We took swift and decisive action to end the contract early and took back all outstanding cases which are all now resolved.

"We have made it clear that tax credit error and fraud checks, which play a key role in making sure that people get what they are entitled to, will in future remain in-house."

A Concentrix spokesman said: "We welcomed the opportunity to engage with the Work and Pensions Select Committee it its inquiry.

"This was a hugely complex contract and programme, and as the committee has highlighted, a number of challenges and issues emerged at the outset.

"We welcome any further investigations into the contract, including the National Audit Office investigation, to ensure all lessons can be learned."