Monitoring the Performance of the Department for Work and Pensions in 2012-13 - Work and Pensions Committee Contents


3  Implementation of Personal Independence Payments

14. The Government decided early in this Parliament to abolish Disability Living Allowance (DLA) for working-age people and replace it with a new benefit—Personal Independence Payment (PIP). The necessary legislative changes formed part of the Welfare Reform Act 2012.

15. DLA provides non-means-tested support for additional living costs arising from long-term disability or health conditions. It is available to people who are both in and out of work and is claimed by a significant number of people: DWP estimated that there would have been 2.2 million working-age DLA claimants in 2015-16 without the reforms.[14]

16. New claims for PIP began, and DLA ceased to be available for new working-age claimants, from April 2013. Migration of existing DLA claimants to PIP followed in October 2013, although at a slower rate than originally envisaged (see below).

17. We became concerned in autumn 2013, based on our own constituency experience and that of other Members, and reports we were receiving from disability organisations, that there were problems with PIP implementation. Claimants have faced long delays—in some cases six months or more—before they have received a decision on their eligibility. Some of the affected claimants are people with terminal illnesses. Problems have also been reported in the service that claimants are receiving, both from DWP and from its contracted providers for PIP, Atos Healthcare and Capita Business Services. We decided to put our concerns to the Minister for Disabled People (Mike Penning MP) in an oral evidence session, which took place on 11 December 2013.[15] This chapter explores our concerns and the action DWP is taking in response.

18. The National Audit Office (NAO) published a report on Personal Independence Payment: early progress on 27 February.[16] The report provides a detailed commentary on progress with PIP implementation. The NAO clearly shares many of our concerns about the process and the impact of delays and service deficiencies on claimants: its overall conclusion is that "early operational performance has been poor: leading to delays and uncertainty for claimants".[17] Our colleagues on the Public Accounts Committee plan to follow their usual practice of taking oral evidence on the NAO report from DWP and other witnesses shortly.

Background to the policy reform

19. HM Treasury announced the Government's intention to reform DLA in the June 2010 emergency Budget. The Government's stated aim was to tackle the rising caseload and cost of DLA by introducing a new face-to-face eligibility assessment. Its assumption was that it would achieve a 20% reduction in caseload and expenditure, saving the Exchequer over £1 billion by 2014-15.[18]

20. In December 2010, DWP consulted on detailed proposals to replace DLA for working-age people with a new benefit—PIP. [19] In our Report on the introduction of PIP published in February 2012, we accepted that there were a number of sound arguments for reforming DLA; in particular that it lacked a consistent and clear system for reviewing awards. However, we expressed a number of specific concerns with the policy as proposed at the time. These focused mainly on: the need to ensure that the PIP assessment contracts incentivised accurate and consistent assessment reports (drawing on previous experience of the difficulties with the Work Capability Assessment used to determine eligibility for Employment and Support Allowance); and the requirement for further testing of the PIP eligibility criteria before the policy was implemented, even if this meant slowing down the implementation timetable.[20]

KEY ELEMENTS OF PIP

21. Like DLA, PIP is a non-contributory, non-means-tested cash benefit which is intended to contribute to the extra costs incurred by disabled people in overcoming barriers to leading full and active lives. PIP has "daily living" and "mobility" components, similar to DLA's care and mobility components. However, each PIP component is paid at two rates—standard or enhanced—whereas the DLA care component is currently paid at three different rates.[21]

22. The Government's intention was to introduce a more rigorous process for establishing entitlement to PIP than was the case for DLA: a much higher proportion of claimants will undergo a face-to-face assessment, carried out by external providers. Contracts for the PIP assessment were awarded to private contractors on the basis of "regional lots". Contracts were awarded to Atos Healthcare in North East England, North West England and Scotland (Lot 1) and London and Southern England (Lot 3). Capita Business Services Ltd was awarded the contracts covering Wales and Central England (Lot 2) and Northern Ireland (Lot 4).[22] The NAO states that, out of the £200 million annual cost of administering PIP, DWP expects to pay £127 million to the contracted providers to carry out the assessments.[23]

Changes to PIP implementation timetable

23. HM Treasury's original announcement of DLA reform included an assumption that PIP would be fully implemented, including reassessment of existing working-age DLA claims, over three years from 2013, with 25% of current working-age DLA recipients reassessed for PIP in 2013-14, 75% of the total by the end of 2014-15 and 100% by the end of 2015-16.[24] The then Minister for Disabled People (Maria Miller MP) told us in December 2011 that she expected all new claims for PIP to be accepted from 2013.[25] Ministers later indicated that DWP intended to move away from a "big-bang" approach to implementation: new claims taken from April 2013 would be limited to "a few thousand per month for the first few months" and initially in one geographical area only, before being extended nationally from June 2013.[26] Reassessment of existing DLA claims was planned to commence in autumn 2013, beginning with fixed-term claims that were due for renewal or in which the claimant had reported a change in circumstances—termed "natural reassessment".

24. In December 2012, DWP outlined further revised plans for implementation of PIP taking account of the responses to its consultations. This confirmed the arrangements for new claims and the beginning of natural reassessment of existing DLA claims. The major change announced was that the process for reassessing all remaining working-age DLA claims, which was originally scheduled to begin from October 2013, would not commence until 2015. This means that the majority of existing claimants will not be reassessed until 2015 or later. Reassessment is now scheduled to be completed by the end of 2017.[27]

FURTHER CHANGES TO THE TIMETABLE ANNOUNCED IN OCTOBER 2013

25. New claims for PIP began as planned in April 2013 in one area and were extended nationally from June.[28] In October, DWP announced that roll-out of PIP to existing DLA claimants had started under the natural reassessment process previously announced. However, this was initially limited to four geographic areas: Wales, East Midlands, West Midlands and East Anglia.[29] In January, the reassessment process was extended to parts of Scotland, and in February to parts of North West and North East England, by designated postcode.[30]

IMPACT OF THE DELAYED IMPLEMENTATION ON COSTS AND SAVINGS

26. DWP was not able to tell us in December what the likely impact of the delayed implementation on projected costs and savings would be.[31] The NAO report estimates that cumulative savings during the Spending Review period will be £640 million compared with the original estimate of £740 million. However, it notes that the Department still expects to achieve the projected £3 billion in savings from the introduction of PIP by 2018-19.[32]

Concerns about delays in deciding claims and service to claimants

27. The DWP Benefits Director, Jason Feeney, told us that DWP's original estimates were "that it would be a 12 to 15-week timeline in terms of getting through the process, right through from application and initial phone call to the decision". However, in practice "the process is taking longer than that in most cases" because "the assumptions we made about how long different parts of the process would take have not been reflected in live running".[33]

28. The first Official Statistics on PIP will not be published until spring 2014. In the meantime, DWP published "management information" on 11 February 2014 which provides some data on PIP claims.[34] These figures bear out the concerns that decisions on claims are taking far longer than anticipated. The cumulative total of new claims to December 2013 was 229,700; the number of decisions made was 43,800. This means that decisions had been made in fewer than 20% of new claims made since April 2013. The NAO report highlights that, in its sample of early claims, claimants were waiting 107 days to receive a decision, against an expectation of 74 days.[35]

REASONS FOR THE DELAYS IN DECISIONS ON AWARDS

29. Jason Feeney explained that there were three main reasons for the delays in decisions being made:

·  Claimants were not getting through the security questions used to confirm an individual's identity when they made the required initial application by telephone. This meant that a follow-up call was required. DWP was seeking to address this by broadening the range of security questions to help claimants through the security process.[36] The NAO report indicates that DWP assumed that new claims information would conflict with existing data in only 20% of claims; the actual figure for initial claims was 83%.[37]

·  Claimants were taking longer than expected to return the written claim form (the PIP2 form) which follows the initial registration of a claim by telephone. Four weeks are allowed for this but it was taking longer for claimants to provide the necessary supporting information. DWP was looking at ways to improve the way it communicated with claimants, so that they understood what was required. It was also considering options to carry out more of the process by phone, or allowing claimants to submit evidence electronically.[38]

·  The contracted providers were taking longer to carry out the assessment process than envisaged. This included booking the appointment for the face-to-face assessment; carrying out the assessment; auditing the assessment; and passing the recommendation back to the DWP decision-maker for the final decision on the claim.[39]

FACE-TO-FACE ASSESSMENTS

30. DWP told us that the providers had been set a target to carry out 97% of the assessments within a six-week period. However, it could not provide us with any statistics on the extent to which this target had been met when we took oral evidence in December.[40] The NAO report notes that DWP originally estimated that the providers would return an assessment, including the quality audit, within 30 working days. By the end of October Atos had completed 55% of assessments within this timeframe and Capita 67%.[41]

31. Dr Bill Gunnyeon, the DWP Chief Medical Adviser, explained that Atos and Capita were using different delivery models: Atos was operating through a "supply chain"; Capita had a "more in-house" approach "with a significant home assessment component".[42] Both providers had encountered difficulties. Atos had realised that the supply chain approach, which required training new healthcare professionals (HCPs) to carry out the assessments, and then auditing them, "does actually make it more time consuming than perhaps had been anticipated".

32. Dr Gunnyeon also highlighted that the HCPs for both Capita and Atos "are subject to 100% audit of their cases until they demonstrate they have achieved the required standard". HCPs are required to achieve five consecutive A grade assessments before they are approved. He acknowledged that the 100% audit "builds in delay" but he believed that this was now "starting to ease" because "we have now got an increasing number of healthcare professionals who are fully approved [...] and therefore are no longer on 100% case audit."[43] The NAO highlights that, at the end of August 2013, when DWP realised the extent of the backlog, it reduced the approval requirement to four A grade and one B grade assessment.[44]

33. Contractors had also found that the average time taken to conduct a face-to-face assessment was initially longer than expected. The NAO found the actual average time taken to be 120 minutes against an expected duration of 75 minutes.[45] Dr Gunnyeon explained that, although DWP "made some assumptions" about the necessary duration of an assessment, no targets were set for this because "one of the things we want is to make sure that people actually get the time they need", and that assessments "are done properly and to the right standard". However, the time taken for each assessment was likely to become shorter as HCPs became more experienced in the process and therefore needed to spend less time to achieve the same standard.[46]

34. DWP also identified that more face-to-face assessments were taking place than originally envisaged. In response to our 2012 report on DLA reform, the Government said that a face-to-face assessment would be "essential" for "most claimants".[47] In a follow-up oral evidence session in January 2013, the then Minister for Disabled People (Esther McVey MP, now Minister for Employment) gave a clearer indication of what "most" would mean in practice: "we would consider 25% of people would not need a face­to­face assessment".[48]

35. In December, the Minister for Disabled People confirmed that DWP had expected the percentage of claims requiring a face-to-face assessment to be "in the upper 70s" but in fact it was currently "in the 90s". Although one of the policy objectives is a higher level of face-to-face assessments, the Minister believed that this percentage was too high and needed to be reduced: around 15% of claimants "are coming for face-to-face assessments that we think probably do not need to".[49] The NAO report confirms that the actual percentage of face-to-face assessments was 97% for Atos and 98% for Capita against an expectation of 75%.[50] The Minister's view was that the number would reduce as the quality of the written evidence provided by applicants in support of claims improved. Dr Gunnyeon added that the increased ability of HCPs to make paper-based decisions, as their experience of the process increased, would also reduce the number of face-to-face assessments. [51]

CONTRACTED PROVIDERS' SERVICE PROVISION FOR CLAIMANTS

36. We also asked DWP about basic administrative failings which seemed to be occurring frequently, such as claimants receiving appointment letters for PIP assessments after the appointment date had passed; appointments being cancelled without the claimant being notified; and a lack of information being made available to claimants when they contacted DWP or the contracted providers with queries about their claim.

37. Jason Feeney explained that the providers were contractually required to give claimants two weeks' notice of an assessment appointment and, where they were not fulfilling that requirement, "that is a failure to comply with the contract".[52] However, Dr Gunnyeon emphasised that "there has been a huge amount of partnership working with the contractors" who were "very committed to trying to improve things" and to "learn lessons".[53]

38. The Minister acknowledged that the current service claimants were receiving from the providers was "not acceptable".[54] More recently, he reiterated in the House that "the process is taking too long" and that "the length of wait is unacceptable".[55] He was very clear in his evidence to us about the remedies available to DWP in relation to the contractors:

    The only way we can improve that situation for the claimant, on whom I completely accept the burden is currently, is to put the contractors' feet to the fire and say, "You either do this contractually or you will suffer the financial penalties." They are in this for a profit because that is what they are there for. If I take that away from them, then they will address that, and they are, to be fair. It is better than it was, but not perfect, and it will need to continue to get better and better. The one thing they do not like is me instructing my civil servants to invoke penalty clauses. That is the last thing they like.[56]

The "penalty clauses" within the contracts with providers allow service credits to be applied. The NAO highlighted that, as the providers have not consistently met agreed performance levels, £1 million of service credits accrued over the two contracts (£0.8 million against Atos; £0.2 million against Capita) between April and October 2013. The Department can apply up to 15% of the invoice value of service credits for a given month.[57]

CLAIMANTS WITH TERMINAL ILLNESSES

39. The NAO found in its early sample of claims that terminally ill claimants were waiting an average of 28 days for their claim to be fully processed, against an expectation of 10 days.[58] DWP acknowledged to us in December that concerns had been raised about the time it was taking to process claims from terminally ill people. It said then that it was working to "fast track" these claims and to ensure that terminally ill people were treated as a priority. [59]

40. Macmillan Cancer Support has also drawn attention to the time it is taking to process new PIP claims from people with a diagnosis of terminal illness and to the problems this creates for them. It highlights that, under DLA, claims from people with a terminal diagnosis (and people with progressive illnesses who were not expected to live for more than six months) were "typically processed" within a target of eight working days under the "Special Rules" procedure. The "Special Rules" procedure also applies in PIP but Macmillan reports that it is taking as long as eight weeks for a PIP claim to move into payment. Macmillan points out that the delays can mean that terminally ill claimants are losing out on as much as £134 a week. It can also impact on caring provision as the PIP award needs to be in place before Carer's Allowance can be paid.[60]

41. Macmillan also pointed to the problems that the new PIP application process is causing for its own staff. Initial telephone applications are often made by Macmillan staff on behalf of a claimant who is terminally ill. There is no dedicated claim line for people with terminal illnesses. Macmillan reported that the telephone applications system requires a number of "lengthy calls" to be made. This has proved far more time-consuming than the DLA process which allowed healthcare staff to complete a paper application form at the same time as the DS1500 (the medical report from a healthcare professional which certifies the terminal diagnosis).[61] The Minister acknowledged that the telephone application system was a problem for Macmillan staff acting on behalf of terminally ill claimants. He said that he was working closely with Macmillan to resolve the problems for healthcare staff supporting claimants. [62]

42. Jason Feeney fully accepted that there had been problems:

    I would absolutely say that the service that we gave for some terminally ill claimants at the beginning of PIP was not up to standard. It certainly was not where we would be expecting it to be. I am not going to try to pretend otherwise. There were some awful experiences that people went through.

However, he believed that the process had now improved and stated that 7,000 out of 8,000 terminal illness claims received had been processed by December 2013. There were now examples of the assessment providers dealing with their part of the claim "within a day". The Minister said that his aim was for terminal illness claims to be fully processed in seven days.[63]

43. DWP has since announced that a dedicated telephone claim service for terminally ill people would be introduced by the end of February 2014. Claimants or their representatives will still have to call the standard PIP claims number but they can then select options to route them to a dedicated team to complete the claim process, (although the DS1500 form will still have to be submitted in support of the claim).[64]

Testing and piloting

44. The NAO report notes that one of the key reasons for the problems DWP has encountered with PIP implementation is the very short period it allowed from the "controlled start" in a limited geographical from April 2013—effectively a pilot—and the national roll-out of new claims from June 2013. The NAO highlights that, although this provided an opportunity to test the IT, staff guidance and telephone application process, it did not allow sufficient time for DWP to test the "end to end process" for making decisions because it takes several weeks for claims to work through the whole assessment and decision-making process.

45. Backlogs began to build up by August 2013 but there was insufficient time to resolve these before the reassessment of existing DLA cases began in October 2013. The NAO concludes: "we continue to be concerned about the ability of the Department to recover quickly from backlogs". [65]

Addressing the problems with PIP implementation

46. One of the most worrying issues for claimants is the inability to establish what has happened to their claim. As constituency MPs we have received many complaints from claimants who feel they are being passed back and forth between DWP and the contracted providers with no-one accepting responsibility for the delays or for providing an update on progress with the claim.

47. The NAO points out that DWP has not told claimants how long claims should take and the delays and lack of information about claims is leading to uncertainty and stress. In addition, although successful claims are backdated, claimants may face short-term financial difficulties while they wait for a decision. The NAO recommends that DWP "set out a clear plan for informing claimants about the likely delays" while they work on improving performance.[66]

48. We agree with the Minister that the current level of service offered to PIP claimants and the length of time claimants are waiting for decisions on their PIP applications is not acceptable. People should not be forced to wait six months or more to find out whether they are entitled to financial support towards the additional costs of living with disabilities and health conditions. Urgent action is required. We recommend that DWP closely examine its own systems and that it work with the contracted providers to resolve the current dire situation. Penalty clauses (service credits) contained in the contracts with providers should be invoked where necessary. We also recommend that DWP clear the existing backlog of claims, and reduce the average time taken to process new claims to the expected 74 days, before it extends the natural reassessment of existing DLA claims to other parts of the country.

49. We agree with the National Audit Office that DWP needs to address the stress and uncertainty being faced by PIP claimants suffering delays. We support its recommendation that DWP set out a plan for informing claimants about the delays they are likely to face. We also recommend that DWP takes immediate steps to ensure that claimants are given accurate and timely information when they raise queries about progress with their claim with either DWP itself or with the contracted providers.

50. It is particularly important that claims from terminally ill people are expedited and that as much of the stress as possible is removed from the process they have to go through to claim PIP. We recommend that DWP set a target of seven days for processing PIP claims from terminally ill people and that it devotes all the necessary resources to ensuring that this target is met.

51. We recommend that DWP also take steps to establish a mechanism for expediting claims from people who may not have a terminal diagnosis, but who have rapidly deteriorating conditions, resulting in a similar need for immediate financial support.

52. The fact that claimants are taking longer to return written PIP claims forms and to provide supporting evidence suggests that the claim form, and the guidance for claimants on accompanying information, need improvement. It may also be the case that the four weeks allowed to return the form and supporting evidence is insufficient. These factors may be contributing to the higher than expected level of face-to-face assessments deemed by the providers to be required. We recommend that DWP consult stakeholders on the adequacy of the PIP claim form and the accompanying information provided to claimants and make amendments to both if these are found to be necessary. The time allowed to submit the completed form and supporting evidence should also be reassessed and extended if necessary.

Data on outcomes of PIP claims

53. The available statistics on PIP awards are still very limited. The "management information" published by DWP in February, covering the period April-December 2013, showed that in 50% of cases the decision had resulted in an award being made. However, this total is skewed by the 100% of awards in terminal illness cases: 37% of standard claims were successful.[67] In response to our request for comparative figures for DLA, DWP said that 46% of new claims for DLA had been accepted in 2012-13. However, this figure included terminal illness claims and claims for children. DWP emphasised that the data were not directly comparable.[68]

Further scrutiny of PIP implementation

54. In our evidence session with the Minister in December, and in this short report section, we have dealt only with the immediate problem of delays in processing PIP claims, which it was clear to us needed to be addressed as a matter of urgency. We expect to carry out a broader assessment of the wider impacts of the implementation of PIP when there is more data available, which would cover: the accuracy of the assessment; outcomes of new claims and DLA reassessments; and the level of appeals.



14   DWP, Personal Independence Payment: assessment thresholds and consultation, January 2012, tables 1 and 2. Back

15   Oral evidence taken on 11 December 2013 from the Minister for Disabled People, HC 911 Back

16   National Audit Office, Personal Independence Payment: early progress, HC 1070, 27 February 2014 (hereafter "NAO report"). Back

17   NAO report, Summary, para 21 Back

18   HM Treasury/HMRC, Budget 2010 Policy Costings, June 2010, p 36 Back

19  DWP, Disability Living Allowance Reform: Public Consultation, December 2010, Cm 7984  Back

20   Work and Pensions Committee, Government support towards the additional living costs of working-age disabled people, Seventh Report of Session 2010-12, HC 1493, Summary, p 4 Back

21   See DWP, Disability Living Allowance Reform, December 2010, Cm 7984, Chapter 2, para 16 Back

22   See DWP, Health and Disability Assessment Services Framework  Back

23   NAO report, Summary, para 4 Back

24  HM Treasury/HMRC, Budget 2010 Policy Costings, June 2010, p 36 Back

25   Work and Pensions Committee, Government support towards the additional living costs of working-age disabled people, Seventh Report of Session 2010-12, HC 1493, para 161 Back

26   HL Deb, 18 January 2012, col 527 Back

27   DWP press release, 28 October2013, "Personal Independence Payment rolls out to existing claimants"; See also DWP, PIP: Reassessments and Impacts, December 2012 Back

28   DWP written evidence, para 5 Back

29   DWP press release, 28 October2013, "Personal Independence Payment rolls out to existing claimants"  Back

30  See DWP website "Introducing PIP: Timetable" accessed 26 February 2014. The postcode areas in Scotland are those beginning: DG (Dumfries and Galloway), EH (Edinburgh), TD (Galashiels) and ML (Motherwell); and in the North of England CA (Carlisle), DL (Darlington), HG (Harrogate), LA (Lancaster) and YO (York) Back

31   DWP supplementary written evidence, January 2014 Back

32   NAO report, Summary, para 13 and NAO press release, 27 February 2014, Personal Independence Payment: early progress Back

33  Oral evidence taken on 11 December 2013, Q68 and DWP written evidence para 23 Back

34   DWP, Personal Independence Payment: Management Information, February 2014 Back

35   NAO report, para 2.7  Back

36   Oral evidence taken on 11 December 2013, Q68; see also Q97 Back

37   NAO report, Summary para 17 and para 3.20 Back

38   Oral evidence taken on 11 December 2013, Q72-3 Back

39   Oral evidence taken on 11 December 2013,Qq69-70 Back

40   Oral evidence taken on 11 December 2013, Qq76-77 Back

41   NAO report, Summary, para 17 Back

42   Oral evidence taken on 11 December 2013, Q81 Back

43   Oral evidence taken on 11 December 2013, Qq82-83 Back

44   NAO report, para 3.21 Back

45   NAO report, Figure 12 Back

46   Oral evidence taken on 11 December 2013, Q76 Back

47   Work and Pensions Committee, First Special Report of Session 2012-13 , Government support towards the additional living costs of working-age disabled people: Government Response to the Committee's Seventh Report of Session 2010-12, HC 105, p 14 [Response to recommendations in paras 153 and 154] Back

48   Oral evidence taken on 21 January 2013 on Personal Independence Payment, HC 916, Q14 Back

49   Oral evidence taken on 11 December 2013, Q96 Back

50   NAO report, Figure 12 Back

51   Oral evidence taken on 11 December 2013, Q96 and HC Deb, 24 February 2014, col 12 Back

52   Oral evidence taken on 11 December 2013, Q89 Back

53   Oral evidence taken on 11 December 2013,Q92 Back

54   Oral evidence taken on 11 December 2013, Q88 Back

55   HC Deb, 24 February 2014, cols 2 and 12 Back

56  Oral evidence taken on 11 December 2013, Q90 Back

57   NAO report, para 3.32 Back

58   NAO report, para 2.7 Back

59   DWP written evidence, para 24 Back

60   Macmillan briefing on PIP and terminally ill claimants for MPs and Peers, December 2013 Back

61   Macmillan briefing on PIP and terminally ill claimants for MPs and Peers, December 2013 Back

62   Oral evidence taken on 11 December 2013, Q102 Back

63   Oral evidence taken on 11 December 2013, Qq102 and 108 Back

64   DWP Stakeholder Bulletin, February 2014 Back

65   NAO report, Summary, para 16 and paras 3.13-3.16 Back

66   NAO report, Summary, para 23a and paras 2.9-2.10 Back

67   DWP, Personal Independence Payment: Management Information, February 2014; and DWP press release, 12 February 2014, "PIP statistics"  Back

68   DWP Supplementary written evidence, January 2014 Back


 
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