Examination of Witnesses (Questions 120-134)
Wednesday 10 December 2003
Mr David Anderson, Professor Mansel Aylward CB, Mr
John Sumner, and Mr Simon Chipperfield, examined.
Q120 Chairman: Why do you not know
whether you can answer it? Are you refusing to answer or do you
not know the answer, or what?
Mr Chipperfield: It is not that
I am refusing to answer. It is that I am not clear on the extent
to which I am permitted under the nature of the contract to reveal
the commercial arrangements of the contract. I need to take advice
from the Department on these questions, if you do not mind.
Mr Anderson: I was going to suggest
that we came back to you in the form of a note. One of the issues
is that presently we are in the process of early re-tendering
for this contract and there are several bidders involved in that
process and therefore publicising some detailed numbers at this
point might prejudice that process.
Q121 Mr Bacon: Perhaps you could
give us a confidential note.[8]
Mr Chipperfield: I am not refusing;
it is merely that I am looking for guidance from my customer as
to what I am able to say.
Q122 Mr Bacon: I understand. Mr Chipperfield,
would you say that overall the contract is profitable?
Mr Chipperfield: It is just about
profitable.
Q123 Mr Bacon: Is it correct that
the only way you can make any profit is to avoid ordering Incapacity
Benefit assessments?
Mr Chipperfield: That would be
totally incorrect.
Q124 Mr Bacon: That would be totally
incorrect. Do you have an informal target, where you expect that
roughly 50% of the applicants would be deemed unfit for work at
the medical scrutiny stage so that they do not end up having an
assessment which costs you money?
Mr Chipperfield: No.
Q125 Mr Bacon: You have no informal
target, no covert target.
Mr Chipperfield: No, we work to
scrutiny guidelines. The calling rate, to which you are referring,
which is the rate at which the doctor makes the decision whether
someone qualifies at the scrutiny stage or whether it is necessary
to call for exam, fluctuates all of the time. Currently it fluctuates
between the early 50%s and into the early 60%s. It varies from
centre to centre. It is not a rate that we manage in any way,
shape or form. It is totally the decision of the doctor using
the scrutiny guidelines as laid down by the Chief Medical Advisor.
Q126 Mr Bacon: Mr Anderson, you are
spending £18 billion of taxpayers' money. 1% of that would
be £180 million. You are only giving Mr Chipperfield £80
million. Do you honestly think that you are spending enough money
on checking whether the people who are getting this £18,000
million of taxpayers' money all deserve it?
Mr Anderson: Yes, I believe that
the processes we have in place for making the decisions are fit
for purpose.
Q127 Mr Bacon: A national charity
will boast if its administration costs are 2% to 4% and that 95%
gets through to the good cause. You are spending less than half
of 1% on making sure that this £18,000 million ends up in
the right place.
Mr Anderson: I do not believe
that is correct.
Q128 Mr Bacon: It says £18,000
million. Mr Chipperfield gets £80 million and, doing the
maths in my head, 10% is £1.8 billion, 1% is £180 million,
divide that by two gives you £90 million which would be 0.5%,
so half of 1% would be £90 million and you are giving him
£80 million, you are giving him less than half of 1%.
Mr Anderson: Mr Chipperfield's
company does not fulfil the whole of the process in administering
the £18 billion of benefit. Quite clearly there is a terrific
amount of activity which takes place inside DWP to administer
that benefit which is not included in that £80 million.
Q129 Mr Bacon: Could you give us
a note on how much the value of that activity is?
Mr Anderson: I do not believe
that information is currently available. Since the merger of the
Benefits Agency and the old Employment Service, we have not yet
implemented a new unit costing system.
Q130 Mr Bacon: So you cannot say
how much money you are spending on checking this £18 billion.
Mr Anderson: No. That information
ought to become available as that system is developed during the
course of next year.
Q131 Chairman: Reference was made
there to the next contract. How do you think it will deliver more
innovation and service quality improvements?
Mr Anderson: Obviously we have
learned during the course of this contract and we would like to
put that experience into the tendering process. A number of firms
have asked to be included in the process and they have been asked
to make their own suggestions as to how the service delivery could
be improved as part of the tendering process. We have five years'
worth of experience of operating the contract that we did not
have last time we let it and we would hope that we could improve
it as a result. It is fair to say that since the extension to
the contract, significant new targets were included for Schlumberger
which have produced some of the improvements which are shown in
this Report.
Chairman: That is a complete non answer
to the question I asked you. When you have had a chance to look
at the transcript, you may be able to give us more information
in a note.[9]
Q132 Jon Cruddas: One brief question.
Can you quantify the number of appeals proportionately where your
doctors, DWP doctors, sit on compared with Appeals Service doctors?
Professor Aylward: How many appeals
doctors who work for SchlumbergerSema sit on appeals?
Q133 Jon Cruddas: Yes.
Professor Aylward: I cannot give
you that figure, but I can provide it.[10]
Q134 Jon Cruddas: Could you provide
it? A lot of questions have revolved around the difference between
the different doctors, so that would be useful.
Mr Chipperfield: If I may answer,
I do not know the exact figure, but I believe it is quite small,
no more than 10 to 20.
Jon Cruddas: It is only because I received
a letter from a disability information advice line and their main
source of criticism was the number of doctors sitting on appeals
who had sat on initial cases; not necessarily the same cases but
as part of the same pool. Therefore they were questioning the
actual relative independence of the appeals systems themselves.
It would be useful to know what the proportions are.
Mr Bacon: May I just say that I think
it is a matter of severe concern that the Department cannot say
how much money is spent scrutinising this process? I very much
hope that our report will reflect that.
Chairman: Thank you very much, Mr Bacon.
Thank you, gentlemen, for coming to see us this afternoon. Clearly
progress has been made since our last report and no doubt we shall
be looking in our report as to how further progress can be made
and another £50 million saved with a bit of luck. Thank you
very much.
8 Commercial in confidence-not printed. Back
9
Ev 17-18. Back
10
Ev 18. Back
| 
