Tax credit claimants who suffered from botched Concentrix outsourcing plan paid just £14 compensation each

Tax credit claimants who suffered as the result of a botched outsourcing plan have been paid just £14 each in compensation each, it has emerged.

Scandal-hit Concentrix adjusted or terminated around 108,000 cases of claimants' tax credits - nearly a third of which were overturned at appeal.

HM Revenue and Customs (HMRC) ended its deal with the contractor after a series of problems came to light.

Records released in Parliament showed HMRC had paid a total of £18,035 to 1,271 people.

Shadow policing minister Louise Haigh, who requested the information, said the amount was “pitiful and insulting”.

She added: “Concentrix walked off the job with £32m of taxpayers' money in their pockets.

“Yet now we learn that the average amount people can expect in compensation is less than £15. That's a pitiful amount and it is simply insulting to the victims.

“The company caused real damage to people's lives and was proven to be wrong in 87 per cent of cases that went to appeal. I can't think of many cases where such terrible failure has been rewarded so well and in such stark contrast to the treatment of the victims.

“The Concentrix and Carillion scandals have shown that too often the bosses walk off with a pay-out while we pay for their mistakes, and the victims are left struggling. Tory privatisation of our public services has been a disaster, and it's about time ministers started learning the lessons.”

The HMRC contract was supposed to tackle fraud and error in the tax credit system by stopping payments to claimants who were not entitled to them.

But almost 90 per cent of people appealing against losing their tax credits won their cases, seeing Concentrix sacked over the "humiliating hardship and debt" it forced on people, sending many to food banks.

The Government subsequently promised not to outsource tax credit fraud investigation work to private companies.

Jon Thompson, head of HMRC, told the Treasury Select Committee at the time: “We will not be going back to the market to seek a third party to help us in any way with the tax credits system.”

But the former Work and Pensions Secretary, Damian Green, later said his department would appoint an “external” provider to help claw back money from claimants of the separate Income Support benefit from April.

The new figures were revealed days after construction giant Carillion collapsed, sparking concern over the scale of Government outsourcing.

The Independent revealed that MPs are now calling for a £300m contract to pay private firms to arrest people who have not settled court fines to be urgently reviewed.

Additional reporting by PA