HMRC creates “reign of terror” for thousands

A damning report by MP’s made a significant reputational dent in HMRC’s moral armour recently.

The Pensions Select Committee found that the nation’s tax collectors had been wholly complicit in an operational strategy that left thousands of vulnerable citizens in “humiliating hardship and debt”.

The strategy involved an outsourcing contract awarded to an American company, Concentrix, tasked with cutting families’ tax credits in cases where fraud was suspected or cases where benefits were otherwise unmerited.

Thousands targeted in HMRCsponsored inquisition

Thousands of people were singled out for attention in error, some seriously.  In one case a claimant was falsely determined to be living with Joseph Rowntree, the celebrated philanthropist who died in 1925.   One wonders what Mr. Rowntree may have thought about those targeted being put in “danger of breaking down through anxiety about the means of living” by HMRC & Concentrix. 

The parliamentary debate on the omnishambles heard myriad anecdotes of their constituents having to pawn jewellery, having their electricity cut off, or spending their remaining £5 on Royal Mail Recorded Delivery to send in evidence to Concentrix.

MPs were clear that HMRC was considered responsible for the “gross failings” of Concentrix.  This company has now been stripped of its contract after thousands had their benefits wrongly stopped.

The effects however, continue to be felt.  Labour MP Fiona McTaggart pulled no punches:

“They [Concentrix] regularly proceeded on totally flimsy evidence … this evidence is selected by HMRC based on its own system…I think we’ve been blaming Concentrix for using flimsy evidence when actually the source of this evidence is HMRC.”

Frank Field, Committee Chairman, recounted the extent of the debacle:

“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.”

It comes as no surprise to learn that Concentrix were incentivised to hit targets by bonuses earned from cutting benefits from ever-higher numbers of citizens.  What emerges is a picture of appalling incompetence, fuelled by avarice and implemented with callous disregard for the very real human consequences of its actions.

The 2 D’s of HMRC PR: Denial and Damage Limitation

The Pensions Select Committee published emails in addendum to the report which showed that, not only were HMRC in full-blown denial of the catastrophic mistakes, but also that they were unaware that Concentrix was failing to meet performance targets.  Instead, HMRC officials praised the firm’s upper management for “working tirelessly”.  The emails also show that it was pressure exerted on Concentrix by HMRC that led to the many cases of failure and much unnecessary hardship across the population.

The situation has now been exposed and the wrongdoings are being righted, but Frank Field did not exaggerate when he declared that Concentrix had orchestrated a “reign of terror”.

Mark Serwotka of the PCS Union sums the sad debacle up neatly:

“Sadly, this could all have been avoided. The fiasco is further evidence it is a false economy to hive off important public services.”

HMRC have a duty to act in the public interest, but as examples like the above demonstrate, we cannot always rely upon them to act correctly or to provide clear and transparent service.