Department for Work and Pensions: Contract management of medical services - Public Accounts Committee Contents

1  The Department's decision-making process

1.  The Department for Work and Pensions (the Department) relies on medical assessments to help its decision-makers reach an appropriate decision on a claimant's entitlement to a range of benefits. The principal medical assessments are the Work Capability Assessments, which are used to assess applications for Employment and Support Allowance and to reassess existing claims for Incapacity Benefit.[2] The Department's contractor for medical services, Atos Healthcare, completed 738,000 face-to-face medical assessments in 2011-12 and charged the Department £112.4 million. Such assessments include the re-assessment of 1.5 million claimants on Incapacity Benefit between 2011 and 2014, the assessment of new claimants of Employment and Support Allowance (as of February 2012 total caseload was 991,000), and an expected 440,000 new claims for Personal Independence Payment[3] each year from April 2013. The Department delivered medical services in-house until August 1998. After that date, service provision was outsourced to a company that now forms part of Atos Healthcare. Atos Healthcare won a seven year contract in 2005 which was extended for three years until 2015, and there is a further option to extend for another two years to 2017.[4]

2.  Work Capability Assessments are an opportunity to hear the personal testimony of claimants and to review the completed questionnaire and any supporting evidence before making a recommendation to the Department's decision makers on the claimant's fitness for work. The role of the decision maker is to check that the Department has considered all relevant evidence and that the recommendations reflect that evidence.[5]

3.  The design of an adequate process to ensure accurate decision-making is a key factor in minimising the costs to the taxpayer and the burden on claimants, but the volume and proportion of successful appeals is too high, which suggests processes are not working effectively. We found that 38% of appeals against the Department's decisions were upheld.[6] Whilst the information is incomplete, the Department told us that the most current data suggests that one third of successful appeals are primarily due to the tribunal reaching a different conclusion on the same evidence.[7] In some cases there is a marked difference between the view taken by the tribunal on the ability of the claimant to work compared to that originally taken by the Department's decision makers. Citizens Advice told us that around 60% of appellants they see who, on the original assessment, scored zero points (which supposedly indicates that they are fully fit to work) but on appeal were designated in a group classified as being the least able to work.[8]

4.  Over the past decade the Department does not appear to have made a great deal of progress in improving the accuracy of its decisions. We reminded the Department of a National Audit Office report in 2003 which included information on appeals and accuracy of the Department's decision-making for eligibility of certain benefits. This noted that Tribunals upheld approximately a quarter of appeals (24% of Disability Living Allowance and Attendance Allowance appeals and 27% for Incapacity Benefit) because it simply disagreed with the decisions made by the Department based on exactly the same evidence.[9]

5.  There is also some evidence that the volume of appeals is increasing dramatically. Citizens Advice told us that the number of people approaching it asking for support in relation to appeals went up by 83% in the months between July and September 2012 compared to the same quarter in 2011.[10] The Department told us that they thought both the numbers of appeals and proportion of successful appeals was currently too high. It considered that one reason for the high level of appeal success may be due to the fact that appeals happened many months after the original decision had been made.[11] Citizens Advice told us that they considered the medical assessment was very process driven and did not consider the impact and outcomes for those people who underwent the test. Disability Rights UK agreed that claimants felt the assessment was done very quickly with a tick-box approach taken.[12]

6.  There is a risk that a standardised, simplistic form-filling approach risks missing vital evidence from the claimant and those who know the claimant and understand their situation.[13] This is particularly the case with claimants suffering from mental health problems or from rare or fluctuating conditions such as dystonia or aphasia. Disability Rights UK told us that they knew of examples where the medical assessors were unaware of particular conditions and their impact on claimants.[14] We also heard that claimants can find the process humiliating, cumbersome and often have false impressions of the assessment procedure.[15]

7.  We welcome the Department's recognition that it needs to improve its understanding of variable conditions and to improve guidance for relevant health care professionals. [16] We were also told that Atos Healthcare now has 60 mental health champions who have particular mental health knowledge, which is also a positive step. Nevertheless, the Department has little information on impacts and burdens on claimants and does not know, for example, the proportion of successful appeals that are from people with mental health conditions.[17]

8.  The Department has started to obtain some high level feedback from HM Courts and Tribunals Service to improve its understanding of why so many appeals are successful but it lacks sufficient information to evaluate whether the current rate of appeals is indicative of serious weaknesses in the decision-making process. Without this information the Department cannot provide clear feedback to its decision-makers and contractor on how to improve the accuracy of its decisions.[18]

9.  The decision-making process also places a burden on the taxpayer in relation to additional costs incurred by government. The Department paid £26.3 million to HM Courts and Tribunals Service in 2011-12, [19] but it has insufficient information on the additional internal costs that it incurs for Work Capability Assessments or wider decision-making.[20] Nor does it know the full cost and impact of its decisions on the public sector, for example, on the National Health Service or local government.[21]

2   C&AG Report, para 1 Back

3   Personal Independence Payment replaces Disability Living Allowance in April 2013 Back

4   C&AG's Report, paras 2 & 1.1 to 1.3 Back

5   C&AG Report para 3.6; Qq 90, 106, 177 Back

6   C&AG Report para 7; Qq 72, 104, 193-196 Back

7   Q 72-74, 216 Back

8   Q 4 Back

9   Qq 210, 216; National Audit Office, Getting it right, putting it right- Improving decision-making and appeals in social security benefits, Session 2002-03, HC 1142 Back

10   Q 6 Back

11   Qq 72, 106 Back

12   Qq 3, 13 Back

13   Q 13 Back

14   Q 18 Back

15   Q 96 Back

16   Q 144 Back

17   Q 219 Back

18   Q 72 Back

19   Q 180 Back

20   Q 184 Back

21   Q 176 Back

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© Parliamentary copyright 2013
Prepared 8 February 2013