The Department for Work and Pensions (DWP) “appears to have repeatedly misjudged what contractors can deliver and the uncertainties underlying what can be achieved", according to the Public Accounts Committee's (PAC) latest report on health and disability assessments.
The report examines delivery of assessments for Employment and Support Allowance (ESA), and Personal Independence Payments (PIP). It finds that despite reductions in the backlog of assessments, and a major contractor change after the early termination of Atos' contract in 2015, claimants are “still not receiving an acceptable level of service from contractors".
There are “particular concerns for claimants with fluctuating and mental health conditions," it says.
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In June 2014, while investigating previous backlogs and delivery problems for the assessments, the PAC recommended that the department should challenge inaccurate or exaggerated claims by contractors.
MPs were therefore “concerned” by a National Audit Office finding which suggested the department had not challenged key assumptions made by contractors “despite holding evidence that assumptions were optimistic”.
As contractors are expected to complete more assessments, says the report, DWP “cannot afford to be complacent and must learn from past experience to ensure contractors are set challenging but realistic targets against which they are held to account".
MPs are also concerned that the operational uncertainties and troubled history of health assessment contracts “could present a further risk to value for money if interest in bidding for contracts declines".
The report says DWP should look at other commercial approaches which can secure value for money if competition declines.
However, giving evidence to the committee in February, DWP's permanent secretary Robert Devereux said he was confident about attracting a range of bidders when new regional contracts are let in summer 2016.
"I am feeling better about that now than when I came in front of the committee two years ago," he said, noting that a gradual improvement of assessment delivery and reduction of the backlog "will help the market response".
Under the new contract, the cost per ESA assessment has risen from £115 to £190, but the report notes that "there has been no noticeable benefit for claimants or taxpayers" as a result of this increase.
"Anxiety for claimants"
Launching the report, PAC chair Meg Hillier said: “Our committee heard evidence of the assessment process continuing to create anxiety for claimants; of double-booked appointments and arduous journey times. Some assessors simply do not understand particular medical conditions.”
Around 60% of appeal decisions about ESA and PIP assessments are successful, and up to 20% of reports sampled by contractors do not meet contractual standards.
Hillier said: "These are serious failings that must be dealt with rigorously. We will expect to see evidence of a more enlightened approach to the needs of claimants, greater transparency over contractor performance and a renewed focus on improving the quality of assessments."
The committee urges the department to publish quarterly national and regional data on contractor performance, saying that “unacceptable” variations in performance, and a lack of transparency mean claimants do not have “a clear expectation of the service they can expect,” creating anxiety for already vulnerable individuals.
A DWP spokesperson said: “As highlighted in this report, we have made good progress to improve health and disability assessments; greatly reducing the backlog and cutting waiting times. But we know there is more to do and remain committed to working with our providers to ensure claimants get the best possible level of service, and taxpayers the best value for money.”