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Exclusive: Serco Have Subcontracted Contact Tracing Jobs To The Company Embroiled In The Tax Credits Scandal And Debt Collection Companies

A Test and Trace form (PA Images)

4 min read

The firm behind last year’s tax credits scandal as well as companies linked to debt collection services are among those who have been handed contact tracing roles by Serco, PoliticsHome can reveal.

The outsourcing giant was handed a lucrative £108m contract earlier this year to run a major part of the government's contract tracing work, but has come under fire for subcontracting dozens of firms to conduct the bulk of the work.

In June, ministers confirmed that Serco had subcontracted approximately 9,000 staff out of the total 10,500 required to run the service to a panel of 29 subcontractors, but refused to reveal the list of firms because of commercial sensitivity.

But PoliticsHome can reveal that Concentrix, the US company behind a major tax credits debacle, are among those who have been handed contracts by Serco to provide staff to run the scheme.

Concentrix had been hired by HMRC in 2014 to tackle fraud and error in the tax credit system, but were removed just two years later following a swathe of complaints from MPs and claimants who had had their benefits reduced or halted by the firm.

Ministers later admitted that 87% of the 36,000 people who lodged an appeal against the firm's rulings had their complaints upheld, while HMRC revealed that the cost of conducting mandatory reviews and closing the 181,000 cases left open by Concentrix had cost a further £30m in staff time.

Last year, the firm faced further criticism over their handling of the UK's Action Fraud call center after an investigation by The Times revealed staff handling calls had described fraud victims as "morons", "psychos" and "screwballs".

Speaking to MPs after the reports, then-civil service chief executive John Manzoni said officials would "make sure" the firm were not awarded further government work "unless they could persuade us that they had got better".

But despite the scandals, the company appears to have been contracted by Serco to run Tier 3 contact tracing services, which involves calling people who have come into close contact with an infected person and telling them to self-isolate.

Meanwhile, Serco have also handed contracts to two companies whose work is connected to debt collection services.

NCO Europe is a debt collection company that bills itself as “the UK's leading customer service provider, from Contact Solutions to creating Payment Plans”, while Arvato CRM UK says it delivers “award-winning customer service and back-office processing services for some of the world’s most respected brands”. It is part of the global network of Arvato, owned by Bertelsman. Its sister company, Arvato Financial Solutions, offers debt collection services

Ministers have already faced criticism over the use of private firms to conduct contact tracing after it was revealed in August that the system had reached just 54% of people who had been in close contact with an infected person in the 20 worst-hit parts of the UK.

A spokesperson for Arvato declined to comment. A spokesperson for the Department for Health directed PoliticsHome to Serco. A spokesperson for the outsourcing firm said: “We went through a due diligence process for all our subcontractors that looked at their contact centre and customer service experience. 

“Some of the subcontractors were already also on the Cabinet Office’s Crown Commercial Framework for Contact Centres.”

 NCO Europe and Concentrix did not respond to requests for comment.

Responding to the story, shadow cabinet minister Rachel Reeves said: "As if continuing outsourcing to a company with such a bad track record wasn't enough, this government didn't even ensure that those it was subcontracting were up to the job.

"Instead of outsourcing to tier upon tier of private companies, this Tory government should have put money into our public services which know local communities better, and are far more efficient.

"With the testing system on the brink of collapse when we need it most, the government has serious questions to answer on why this subcontractor - embroiled in scandal and with a track record of failing government services - was given responsibility for part of one of the most systems in our country."

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