An American outsourcing giant criticised for its controversial pursuit of benefit recipients on behalf of the tax office is set to become the Ministry of Justice’s debt collector, The Independent can reveal.
Concentrix is understood to be the only company being considered by the Government for a £675m contract to collect court fines. The deal would include pursuing those who are struggling to pay the contentious criminal courts charge – a fixed-fee penalty imposed on all convicts, irrespective of their means.
More than 50 magistrates have quit in recent weeks in opposition to the charge in England and Wales. Critics say it encourages poor people to plead guilty, because the fee can be up to 10 times higher if they are convicted after pleading not guilty.
The choice of Concentrix to collect court debts has surprised many, given its performance in a contract with HM Revenue and Customs to pursue fraud and error detection. The Independent revealed earlier this year that Concentrix had sent speculative letters to thousands of people on low incomes accusing them of cheating on their tax credits.
The act was described as a vast “fishing expedition,” but Concentrix says it was just acting within HMRC guidelines. A spokesman for the company defended its record: “Checks are carried out only where there is an indication that a tax credits claim may be incorrect and last year checks by HMRC led to corrections of more than £700m. Suggestions that this process is a random exercise are simply incorrect.”
The company has also been questioned over its efficacy in the HMRC contract. The National Audit Office criticised Concentrix this summer for only making savings of £500,000 in the first year of investigating tax credits, despite estimating the savings would be £285m. Concentrix says the figure does not represent a full year of the contract.
The privatisation of court debt collection – which will include the use of bailiffs – has already prompted outrage from MPs and campaigners, who fear a private company would use more aggressive tactics. Michael Gove, the Justice Secretary, signed off on the business case for privatising the collection of court debts in July but has refused to share the details. MPs have asked to see it but the minister has pleaded commercial sensitivity.
Court debt collection is currently carried out by the National Compliance Enforcement Service (NCES), which brought in £518m in fines, penalties and confiscation orders in the year 2013-14.
MPs signing an Early Day Motion opposed to its privatisation, point out the service has continued to improve collection rates despite cuts to staff and resources.
Lord Falconer, the shadow Justice Secretary, said: “This has the makings of yet another disastrous privatisation from the Ministry of Justice. Clearly, it has learned nothing from the failure of the Serco and G4S tagging contracts or from the reckless privatisation of probation services that puts the public at risk.
“Fine collection requires the highest level of probity and accountability, and is competently handled by the current in-house service.
“To have ended up with a single bidder, and one who seems completely unsuited to the task, makes a farce of competition and shows Gove is following Grayling in his blinkered and ideological pursuit of outsourcing at any cost.”
General secretary of the Public and Commercial Services Union (PCS), Mark Serwotka, said: “We remain opposed to this sell-off. We do not believe it should be run for profit and in the hands of private bailiffs, who we fear could bring the system into disrepute by cherry-picking easier cases and being more aggressive in their approach.”
Frances Crook, chief executive of the Howard League for Penal Reform, is urging Concentrix to withdraw its bid – saying the contract for administering the “unfair, unrealistic and unjust” criminal courts charge would do the company more harm than good. In a letter sent to Concentrix’s chief executive, Chris Caldwell, she warned that the company was unlikely to be able to collect the charge from people “who do not have the means to pay for it.”
She added that Concentrix risked reputational damage in “being seen to profit... from the indigent, the mentally ill and the homeless”.
Ms Crook said: “The iniquitous criminal courts charge continues to attract criticism from across the spectrum and increasingly looks like an untenable policy that must be reversed by the Ministry of Justice. Case after case shows not only how unfair and unjust the charge is, but how it is simply unrealistic to expect the monies involved to be collected from people before the courts who simply cannot pay.
“All too often we see outsourcing companies stand aside from moral questions around government policy, abdicating any responsibility for their own actions. There is an opportunity here for this company to stand up and show that the private sector also recognises the criminal courts charge is wrong.”
The MoJ insists the policy is fair since it makes offenders contribute to the cost of running the court. It says the charge is only taken from the offender after other fines have been paid, with a payment plan that is linked to ability to pay.
Commenting on the Concentrix deal, an MoJ spokesman said: “This contract has not been awarded and no decisions have been made. Any decisions will be made following a robust approvals process.” A spokesman for Concentrix did not deny the contract was imminent but said the company “has not been appointed by HM Courts & Tribunals Service.”
Part of a multibillion-pound US business services company, the American conglomerate has more than 54,000 staff in 24 countries. Concentrix’s UK operation is based in Belfast.
Join our new commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies