Synnex Concentrix UK: Ministry of Justice scraps plans to outsource collection of court fines to US conglomerate

The Ministry of Justice has scrapped a contentious plan to outsource the collection of court fines to an American conglomerate that has faced criticism for its work tackling tax credit fraud.

In another major policy shift, following the appointment of Michael Gove as Justice Secretary, the MoJ announced that it was abandoning its procurement competition for the collection of fines and fixed penalties.

The move comes just a month after The Independent revealed that Synnex Concentrix UK was the preferred bidder for the £500m deal.

The company faced criticism earlier this year after it emerged it 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 said it was just acting within HMRC guidelines.

In a written statement to Parliament the Justice minister, Shailesh Vara, said the decision had been made following a “reconsideration of the department’s requirements”.

“We have decided that outsourcing these services to a single supplier is not the best option for HM Courts and Tribunals Service [HMCTS],” he said. “This decision is based on the need to ensure that any contract we let completely meets our requirements, provides best value for the taxpayer and complies with procurement law.

“Ministers have set out the importance of reforming HMCTS to provide a modern and efficient service for society. Improving compliance and enforcement services will continue to form a key part of that work. We believe that in-house modernisation is the best option for HMCTS.”

When the tender for the five-year contract was published in 2013, HMCTS said it believed involving a commercial organisation would “bring in the necessary investment and technology needed to help increase fine collection, reduce enforcement costs and importantly ensure more criminals pay”.

But ahead of the summer parliamentary recess, 27 MPs including the Labour leader Jeremy Corbyn and the shadow Chancellor, John McDonnell, signed an early day motion attacking the proposals.

The MPs praised the National Compliance Enforcement Service for having “continued to improve collection rates despite cuts to staff and resources” and urged ministers “to listen to the concerns of staff working within the NCES to make certain that this vital part of the justice service is not put in the hands of a private company who will put profit before justice”.

A MoJ source said the move was not connected with the contentious criminal courts charge – a fixed-fee penalty imposed on all convicts, irrespective of their means.

The Department is also reviewing the courts charge and is expected to announce that it will be reformed to make it less arbitrary and punitive later this year. The MoJ’s move has been welcomed by the Public and Commercial Services union, whose members include NCES staff.