3 Implementation of Personal Independence
14. The Government decided early in this Parliament
to abolish Disability Living Allowance (DLA) for working-age people
and replace it with a new benefitPersonal 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.
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 delaysin some cases six months or morebefore
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.
This chapter explores our concerns and the action DWP is taking
18. The National Audit Office (NAO) published a report
on Personal Independence Payment: early progress on 27
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
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.
20. In December 2010, DWP consulted on detailed proposals
to replace DLA for working-age people with a new benefitPIP.
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.
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 ratesstandard or enhancedwhereas
the DLA care component is currently paid at three different rates.
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).
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.
Changes to PIP implementation
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.
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.
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
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 circumstancestermed "natural
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.
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.
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.
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.
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.
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.
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".
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.
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.
REASONS FOR THE DELAYS IN DECISIONS
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.
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%.
· 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.
· 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.
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
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%.
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".
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."
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.
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.
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.
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".
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".
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".
The NAO report confirms that the actual percentage of face-to-face
assessments was 97% for Atos and 98% for Capita against an expectation
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.
CONTRACTED PROVIDERS' SERVICE PROVISION
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".
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
38. The Minister acknowledged that the current service
claimants were receiving from the providers was "not acceptable".
More recently, he reiterated in the House that "the process
is taking too long" and that "the length of wait is
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.
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
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
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. 
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.
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
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.
42. Jason Feeney fully accepted that there had been
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
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.
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).
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 2013effectively a
pilotand 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
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". 
Addressing the problems with
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
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.
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
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.
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.
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
Oral evidence taken on 11 December 2013 from the Minister for
Disabled People, HC 911 Back
National Audit Office, Personal Independence Payment: early progress,
HC 1070, 27 February 2014 (hereafter "NAO report"). Back
NAO report, Summary, para 21 Back
HM Treasury/HMRC, Budget 2010 Policy Costings, June 2010, p 36 Back
Disability Living Allowance Reform: Public Consultation, December
2010, Cm 7984 Back
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
See DWP, Disability Living Allowance Reform, December 2010, Cm
7984, Chapter 2, para 16 Back
See DWP, Health and Disability Assessment Services Framework Back
NAO report, Summary, para 4 Back
Treasury/HMRC, Budget 2010 Policy Costings, June 2010, p 36 Back
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
HL Deb, 18 January 2012, col 527 Back
DWP press release, 28 October2013, "Personal Independence Payment rolls out to existing claimants";
See also DWP, PIP: Reassessments and Impacts, December 2012 Back
DWP written evidence, para 5 Back
DWP press release, 28 October2013, "Personal Independence Payment rolls out to existing claimants"
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
DWP supplementary written evidence, January 2014 Back
NAO report, Summary, para 13 and NAO press release, 27 February 2014,
Personal Independence Payment: early progress Back
evidence taken on 11 December 2013, Q68 and DWP written evidence
para 23 Back
DWP, Personal Independence Payment: Management Information,
February 2014 Back
NAO report, para 2.7 Back
Oral evidence taken on 11 December 2013, Q68; see also Q97 Back
NAO report, Summary para 17 and para 3.20 Back
Oral evidence taken on 11 December 2013, Q72-3 Back
Oral evidence taken on 11 December 2013,Qq69-70 Back
Oral evidence taken on 11 December 2013, Qq76-77 Back
NAO report, Summary, para 17 Back
Oral evidence taken on 11 December 2013, Q81 Back
Oral evidence taken on 11 December 2013, Qq82-83 Back
NAO report, para 3.21 Back
NAO report, Figure 12 Back
Oral evidence taken on 11 December 2013, Q76 Back
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
Oral evidence taken on 21 January 2013 on Personal Independence Payment,
HC 916, Q14 Back
Oral evidence taken on 11 December 2013, Q96 Back
NAO report, Figure 12 Back
Oral evidence taken on 11 December 2013, Q96 and HC Deb, 24 February
2014, col 12 Back
Oral evidence taken on 11 December 2013, Q89 Back
Oral evidence taken on 11 December 2013,Q92 Back
Oral evidence taken on 11 December 2013, Q88 Back
HC Deb, 24 February 2014, cols 2 and 12 Back
evidence taken on 11 December 2013, Q90 Back
NAO report, para 3.32 Back
NAO report, para 2.7 Back
DWP written evidence, para 24 Back
Macmillan briefing on PIP and terminally ill claimants for MPs and
Peers, December 2013 Back
Macmillan briefing on PIP and terminally ill claimants for MPs and
Peers, December 2013 Back
Oral evidence taken on 11 December 2013, Q102 Back
Oral evidence taken on 11 December 2013, Qq102 and 108 Back
DWP Stakeholder Bulletin, February 2014 Back
NAO report, Summary, para 16 and paras 3.13-3.16 Back
NAO report, Summary, para 23a and paras 2.9-2.10 Back
DWP, Personal Independence Payment: Management Information, February
2014; and DWP press release, 12 February 2014, "PIP statistics"
DWP Supplementary written evidence, January 2014 Back