Conclusions and recommendations
1. The decision-making process for new Employment
Support Allowance applications and Incapacity Benefit reassessments
all too often leads to the wrong decisions and is failing far
too many people. Claimants
have successfully challenged these decisions in 38% of appeals.
In one third of these cases, the appeals have been upheld simply
because the Tribunal disagrees with the original decision rather
than because new evidence is provided on the day. This raises
serious questions about the quality of the overall decision-making
process. The Department represented appeals as an inherent part
of the process but it does not have the information to judge whether
the current rate of appeals indicates serious weaknesses in the
decision-making process which could be rectified. We welcome the
recent actions by the Department to obtain feedback from HM Courts
and Tribunals Service. The Department must collect the detailed
information needed to understand why there are so many appeals
and why so many of them are successful, so that the contractor
can improve its performance and DWP can change its assessment
process if necessary.
2. The Work Capability Assessment may unduly
penalise people with specific health problems.
The one size fits all approach is not appropriate for particular
groups, for example, people with mental health, rare or variable
conditions. The process is too inflexible and makes it extremely
difficult for individuals with particular conditions to demonstrate
the impact of their conditions on their ability to work. Too often
the process is so stressful for applicants that it can impact
on their health. The Department should assess whether the Work
Capability Assessment process is unfair to these claimant groups
by looking at whether its initial decision is less accurate in
these cases and, if so, make changes to its processes where appropriate.
We welcome the initial efforts made to improve the process and
encourage the Department to continue to review the operation of
the work capability assessment for vulnerable groups.
3. The Department does not know the full cost
to the taxpayer of the overall decision-making process for Work
Capability Assessments. Whilst some costs
are known, such as the £26.3 million paid to HM Courts and
Tribunals Service for its work on appeals, there is little information
on the cost and impact on the National Health Service or on some
of the internal interactions within the Department. Without a
full understanding of these costs, the Department cannot come
to an evidence-based conclusion on the value for money of its
current decision-making process. The Department should establish
the full costs of the process so that it can benchmark with relevant
organisations on the cost effectiveness of its approach.
4. The Department has failed to develop a
competitive market for medical services. The
market for medical service providers is under-developed and Atos
Healthcare is currently the sole supplier for all the Department's
medical assessments. It has also been awarded two of the three
current contracts for the Personal Independence Payment. The Department
is too relaxed about the risk to value for money resulting from
a dependence on a monopoly supplier, and on the limitations this
has on the Department's capacity to remedy poor performance. The
Department should assess the risks associated with the use of
a monopoly supplier and actively pursue opportunities to develop
a competitive market through the deployment of its framework contract.
5. The Department lacks sufficient rigour
in managing the contract with Atos Healthcare. It
has adopted a light-touch approach to managing this contract and
placed too much reliance upon information provided by the contractor.
The Department seems reluctant to challenge Atos Healthcare. It
has failed to withhold payment for poor performance and rarely
checked that it is being correctly charged for work. The lack
of challenging targets for medical quality allows the contractor
to conduct thousands of poorly administered tests each year without
sanction. The Department needs to reduce its dependence on the
contractor's information and processes by adopting a more active
and interventionist approach to contract management. This should
include obtaining more of its own assurance on information provided
by Atos Healthcare, active enforcement of the sanctions available
to it through the service credit regime and the setting of more
challenging targets on the quality of medical assessments.
6. The Department cannot explain how the contractor's
profits reflect the limited risk that it bears.
Moreover, in a new contract for the Personal Independence Payment,
Atos Healthcare is sub-contracting to the National Health Service
for part of its work, suggesting it is transferring risk back
to the public sector. The Department should explain how the profitability
of the contract reflects the actual transfer of risk for both
the Work Capability Assessment and the Personal Independence Payment
medical assessment contracts.
7. The Department must improve its internal
processes to improve the quality of decision-making and contract
management. The size of the Department
and its impact on individuals and on the public purse requires
us to have the utmost confidence in the capability of the Department
to deliver. Robust systems are a crucial part of this. We are
concerned that the Department is unduly complacent regarding the
quality of the decision-making process, particularly given the
hardship which can be caused to individuals when the decision
is wrong.
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