Support 100 years of independent journalism.

  1. Politics
19 September 2016

How private companies are failing our citizens

Concentrix and Atos are part of a wider problem, argues Louise Haigh. 

By louise haigh

This summer I was inundated with messages from lone parents who had been wrongly stripped of the tax credits which are their lifeline – they were in utter despair at the actions of a multi-national they had never heard of and which was unwilling to operate even the most basic standard of service all the while treating them with utter contempt.

But this wasn’t just an isolated example of incompetence or indifference from a contractor that the government has been forced to drop. Minister themselves were responsible for designing contracts structured to relentlessly pursue the most vulnerable. Indeed, it is there in black and white on page 45 of the tender agreement which insisted and encouraged the contractor to “maximise monetary value”.

With that aim they were to pursue upwards of two million tax credit claims, some of which were thought to be erroneous or fraudulent, but most of which were a legitimate and vital lifeline for the parents and children who relied on them.

And this is from a government that has weaponised “benefits” for their political ends – as the former Deputy Prime Minister recently admitted, the then Chancellor casually cut welfare for the poorest in order to boost Tory popularity.

Now we are seeing the human consequences.

Sign up for The New Statesman’s newsletters Tick the boxes of the newsletters you would like to receive. Quick and essential guide to domestic and global politics from the New Statesman's politics team. The New Statesman’s global affairs newsletter, every Monday and Friday. The best of the New Statesman, delivered to your inbox every weekday morning. A handy, three-minute glance at the week ahead in companies, markets, regulation and investment, landing in your inbox every Monday morning. Our weekly culture newsletter – from books and art to pop culture and memes – sent every Friday. A weekly round-up of some of the best articles featured in the most recent issue of the New Statesman, sent each Saturday. A weekly dig into the New Statesman’s archive of over 100 years of stellar and influential journalism, sent each Wednesday. Sign up to receive information regarding NS events, subscription offers & product updates.
I consent to New Statesman Media Group collecting my details provided via this form in accordance with the Privacy Policy

Faceless multinationals ruthlessly pursuing single parents and families trying to do their best – working hard and raising a family – but who are being treated as guilty until proven innocent. Accused of living with people they have never met, or told they had the tax credits arbitrarily cut because of the they didn’t respond to a letter they never received. One single mum who worked two jobs for little pay said to me “I feel as though I am being treated as a criminal”.

Nor were these just one off, exceptional failures – the government eventually admitted in response to my parliamentary questions that there were nearly 6,000 mistaken reductions in claims in the ten months from October to August. Just one such mistake can lead to someone forced to live on £20per week and rely on the local food bank is unacceptable. Six thousand is a scandal.

This is the true face of not just the Tories’ long, ruthlessly successful political attack on welfare but of their determination to offload the basic functions of the state to the lowest profit-making bidder. Where the government’s responsibilities are handed over to a multi-national corporation that can fail, fail and fail again to meet even the most basic performance targets laid out in the contract but little action is taken because it was the vulnerable and the voiceless suffering for these failures.

It is a scandal that they were ignored and disregarded and that the government seemed to take little interest in the voices of thousands until their cases were raised in Parliament and the press.

At the heart of the problem is the introduction of an inappropriate profit incentive into welfare and other sensitive areas of the state. Just last week the Social Security Advisory Committee warned of the conflict of interest in pursuing profit at the potential expense of claimants. It is not even the best way to reduce real fraud, which is often harder and therefore more expensive than simply pursuing the most vulnerable recipients to hit simplistic contractual targets. 

Concentrix and Atos are just the two most high-profile examples of an ever-growing shadow state in which some of the government’s more dubious policy priorities are pursued for private profit. Under the coalition, outsourcing almost doubled to £120bn – never before has private profit had such a large stake in our state; transparency and accountability has diminished in consequence. The result is the scandal exposed this week.

What’s more the public don’t like it either: only 22 per cent of us believe that private providers working in the public sector operate in our interests.

This is a big test for the new government: now is the time for a root-and-branch review into private involvement in our welfare state – which extends far beyond tax credit claimants – before the next such scandal exposes yet more suffering.