IT failures and an inability to cope with the volume of calls led to the early termination of an Her Majesty’s Revenue and Customs contract with supplier Concentrix, according to a spending watchdog.
Concentrix contract with HMRC delivered only £193m of predicted £1bn savings- Photo credit: HMRC
Her Majesty’s Revenue and Customs contract with supplier Concentrix, according to a spending watchdog.
Concentrix was appointed in May 2014 to review and correct personal tax credit payments for the department.
However, the contract was ended by mutual agreement in November 2016, delivering only £193m of predicted savings of £1 billion.
A National Audit Office report into the contract this week said: “A routine technical update to Concentrix’s systems on 11 August 2016 prevented its staff from accessing or updating claimant details for a total period of 26 hours.
“This lack of access led to higher call volumes from 12 August onwards.”
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The supplier was unable to cope with the volume of calls from claimants during the month, when calls reached a peak of 48,000 a week, compared to an estimated 8,000, the NAO said.
Between November 2014 and September 2015, Concentrix consistently failed to achieve over half of its performance targets, the report said.
Concentrix met only 104 of a total 242 applicable monthly performance indicators during the period.
In July 2015, it only answered an average of 4.8% of calls within five minutes, compared to a target of 90%.
HMRC originally expected to pay Concentrix between £55 million and £75 million over the three-year life of the contract, but ended up paying £30m.
Concentrix told the NAO that it made a loss of £20.5 million on the contract.
The department has now transferred 243 staff from the company under TUPE regulations to work on tax credit and fraud interventions.
