Employment and Support Allowance and Work Capability Assessments - Work and Pensions Committee Contents

List of conclusions and recommendations

In this List, conclusions are set out in plain type and recommendations, to which the Government is required to respond, are set out in italic type.

ESA claims process and outcomes

1.  It is too early to predict whether the current trends in ESA outcomes will stabilise. However, we note the recognition within the ESA system that a higher proportion of claimants than initially expected are not fit for work and are therefore eligible for ESA, and that, of these, many need the higher level of benefit and absence of work-related conditionality which the Support Group provides. Nevertheless, it is clear that many claimants still find the process very stressful. Many find themselves in an outcome group which does not reflect their health barriers to employment, because the current system is not sufficiently sophisticated to cope with the wide variety in prognosis and impact which arises from the huge range of conditions which claimants present with. (Paragraph 16)

2.  We raise concerns about the current system and set out a number of shorter-term changes which we believe will help ameliorate some of its most egregious flaws. However, our overall conclusion is that the design of the ESA benefit and assessment process is so problematic, particularly in relation to the confusion and limitations of the outcome groups, that its inefficiencies and the detriment inappropriate decisions cause to claimants can only be resolved in a fundamental redesign of the ESA claims process over the next few years. (Paragraph 17)

Improving the claims process: DWP's role

3.  The current ESA process is too long and complex. We agree with Dr Litchfield that it would be improved if DWP itself, and not the assessment provider, issued the ESA50 and decided whether a face-to-face assessment and/or additional evidence was necessary. This would both speed up the process and put the DWP decision-maker at the heart of the process. We recommend that this change be implemented when the new provider starts delivering the WCA. (Paragraph 25)

Supporting evidence

4.  As part of this new process we recommend that DWP decision-makers (DMs) proactively seek additional evidence, from both health and social care professionals, rather than placing the onus to do this on claimants (although claimants should retain the right to submit evidence with their ESA50 if they wish to do so). DMs are best placed to know whether additional evidence is necessary, whereas claimants may not know what evidence would be most useful or from whom to seek it, and may not be able to afford the significant charges which some GPs and other professionals require. Although this change may lengthen the decision-making period and may incur some additional public expense, this is likely to be balanced by a reduction in the number of appeals, which are expensive, time-consuming and stressful for claimants. DWP should also make clear guidance available to both professionals and claimants on what evidence is most useful in the process. This guidance should explain that supporting evidence needs to set out how a condition affects a claimant's functional capacity. DWP might also wish to explore options for providing training on this for GPs and other professionals. (Paragraph 26)

Paper-based assessments

5.  We also recommend that DMs give much more careful consideration to whether a claimant can be placed in the Support Group without having to undergo a face-to-face assessment. Paper-based decisions are quicker, cheaper and less stressful for claimants, and may well be possible for a greater number of claims than is currently the case. However, we do not believe that paper-based assessments are appropriate for placing people in the WRAG, as can currently happen with IB reassessments (but not ESA new claims), because moving a claimant to a lower level of benefit should be based on the widest available evidence, particularly given the additional job-search conditionality which arises from being in the WRAG. We recommend that DWP change this policy urgently so that IB claimants are not placed in the WRAG without a face-to-face assessment. (Paragraph 27)

Frequency of reassessments

6.  We acknowledge that reassessments are a necessary feature of the ESA system, to ensure that claimants remain in the correct benefit group with the right level of conditionality placed on them. However, reassessments are occurring too frequently, particularly for claimants with progressive conditions and ones which are unlikely to change. They also often take place too soon after successful appeals. Unnecessary reassessments are distressing for the claimant and a waste of public money. We recommend that DWP implements the recommendations of the independent reviewers on reassessment intervals without further delay, and that it looks again at whether its current reassessment criteria are in the best interests of claimants and are a good use of public funds. A speedy decision on this would assist the new contractor to plan its work. (Paragraph 32)

Communication with claimants

7.  We welcome DWP's acceptance of Dr Litchfield's recommendation that all ESA-related forms and letters should be reviewed. We recommend that DWP improve the way it communicates with claimants, both in writing and in telephone calls. It should ensure that forms, including the ESA50, and letters are user-friendly and in plain English; the language used should be clear, with explanations of the more technical terms; and confusing legal explanations should be in footnotes or annexes rather than the main text. The terms "limited capability for work" (for those placed in the WRAG) and "limited capability for work-related activity" (for those placed in the Support Group) are very confusing for claimants. We recommend that DWP finds more meaningful terminology to use in explaining decisions on ESA claims to claimants. (Paragraph 36)

8.  Communication with contribution-based ESA claimants placed in the WRAG is particularly important because they need to understand that their ESA will terminate after a year. The consequences for claimants of the 12 month time-limit and the options available to request mandatory reconsideration of the WRAG decision and to apply for income-based ESA at the end of the time-limit should be clearly set out. We recommend that DWP ensure that these claimants receive specific and clear information on the implications of this claim outcome, including when the time-limit starts and when it will end, both in the decision letter and in the Decision Assurance telephone call. (Paragraph 39)

Appropriateness of the WRAG for people with long-term conditions

9.  More than 80,000 new ESA claimants and IB claimants undergoing reassessment, many of them with progressive conditions, have been placed in the WRAG since ESA was introduced, with a prognosis statement that a change in their functional abilities is unlikely in the longer term. The purpose of the WRAG is to provide work-related support for people who are expected to be fit for work in the short to medium term. Work-related conditionality accompanies this designation. We believe that it is wholly inappropriate to place people in the WRAG if they have a condition which is unlikely to improve and which makes their prospect of returning to work remote. We therefore recommend that DWP changes its practice so that claimants with this prognosis are allocated to the Support Group and not to the WRAG. (Paragraph 43)

Design and application of the WCA descriptors

10.  We welcome the Evidence Based Review as a step towards evaluating the effectiveness of the WCA descriptors. However we do not believe that the Review was sufficient in itself to lay to rest concerns about the descriptors. There were factors both in the way the Alternative Assessment was piloted, and in how its outcomes were compared with those of the WCA, which limit its value as a comparative test. To help address the limitations of the descriptors in the short term, we recommend that DWP remind both Atos assessors and its decision-makers that they must take proper account, in coming to a decision, of the claimant's ability to undertake an activity reliably, repeatedly and safely. Clear guidance should be issued to HCPs to avoid reporting inferences from a claimant's responses as factual statements of capability (as recommended by Dr Litchfield), and instead to use follow-up questions to ensure that they fully understand the impact of a health condition or disability on a claimant's functionality. In the longer-term, DWP should reconsider the effectiveness of the descriptors as part of the redesign of the system that we recommend in Chapter 8. (Paragraph 58)

Future delivery of the face-to-face assessment

11.  Atos has become a "lightning rod" for much public dissatisfaction with the benefit decisions people receive. This is unlikely to change if the WCA is simply "rebranded" by moving to a new provider, who will inevitably face a huge challenge in delivering the new contract. We recommend that the Government takes steps to communicate clearly to claimants, the wider general public and the media, that it is DWP which decides on benefit eligibility, not the contracted provider of the WCA, and that the face-to-face assessment is just one part of the decision-making process. (Paragraph 80)

Service standards and contract management

12.  Although some progress has been made, concerns remain about the accessibility of Atos assessment centres, the overbooking of appointments, and the manner in which some claimants are dealt with by assessors. We recommend that DWP specifies exacting service standards relating to these aspects of the claimant's experience of the WCA in the new contract. The Minister made clear that the Government is willing to pay more for a service that meets the standards that claimants and taxpayers are entitled to expect. We welcome this acknowledgement that, as assessments are to remain part of the welfare system, they should be adequately funded. (Paragraph 83)

13.  If claimant confidence in the process is to be restored, the new contractor will need to demonstrate that its staff have the expertise necessary to carry out effective assessments of claimants presenting with the more difficult conditions, including those which are progressive, fluctuating or relate to mental and cognitive health. We support Dr Litchfield's recommendation that assessors should have suitable and sufficient experience in mental health. We recommend that this should be set out on the face of the contract and that DWP extend this to other conditions which are acknowledged to be difficult to assess. (Paragraph 84)

14.  There have been fundamental problems with the current WCA contract in terms of meeting the requirements on throughput and quality. The current backlog of 700,000 cases awaiting assessment is unacceptable. People with health conditions and disabilities should not be left for months with uncertainty about their benefit entitlement. The fault does not lie with Atos alone; DWP has changed the contract a number of times and its own forecasts of referral levels have sometimes been inaccurate. DWP should also have done more to manage the contract effectively, to prevent the problems which have caused detriment to claimants occurring in the first place. (Paragraph 86)

15.  The new WCA contract needs to balance the quality of assessment reports with specified levels of throughput of referrals which avoid backlogs and delays to claimants. Achieving this balance will depend heavily on DWP providing accurate forecasts of referral levels, as well as the efficiency of the provider. To ensure transparency, we recommend that DWP publishes the forecast levels of referrals which will be specified in the new contract. These will need to include different levels to take account of: the initial period when the backlog is being cleared; the period when the IB reassessment is being completed alongside new claims continuing; and then the period when steady state is achieved and only ESA new claims and reassessments of existing claims are being processed. (Paragraph 87)

16.  We recommend that DWP takes all necessary steps to assure itself that the new provider has the capacity to deliver both quality and quantity of assessments. Performance indicators should be challenging and transparent and financial penalties should be applied if specified standards are not met. However, given the extreme negativity around the existing contract, the WCA is unlikely to appeal to the few private contractors with the necessary capacity to take it on. DWP's willingness to offer incentives in the new contract, as well as imposing penalties, is therefore welcome. (Paragraph 88)

17.  DWP also needs to demonstrate that it has sufficient expertise and capacity to manage a contract of this size and complexity, to ensure value for public money and that claimants receive an acceptable level of service. This does not appear to have been the case with the Atos contract. If this capacity does not currently exist, we recommend that it be developed as a matter of urgency, bringing in expertise from other parts of Government if necessary. We welcome the Government's plans, in the longer term, to bring in multiple providers. This makes it even more important that DWP should develop its contract management expertise. Once the new contractor has been selected, we recommend that DWP make public the cost of the contract to the public purse (and how far that differs from the previous contract), the way payments will be calculated, and the basic service standards, including the average number of assessments to be carried out per assessor per day. Greater transparency on such matters would avoid some of the controversy which has dogged this benefit. The Government may also wish to take this opportunity to consider whether, in the light of the negativity around the delivery of the face-to-face assessment by a private provider, it would be more appropriate for the assessment process to be taken back in house. (Paragraph 89)

Mandatory reconsideration

18.  We have previously expressed concern about the high number of appeals against ESA decisions. Appeals are both expensive to the public purse and stressful for claimants and we welcome the introduction of mandatory reconsideration (MR) as a step towards reducing the number of unnecessary appeals. However insufficient information is currently available to allow us to evaluate whether it is likely to have this effect in the longer term. The reduction in the number of DWP decisions, due to temporary operational changes, is likely to have contributed to the significant reduction in appeals shown in the latest statistics, rather than representing a long-term change arising solely from MR. We welcome DWP's assurance that an analysis of the reasons behind the reduction in appeals will be undertaken. (Paragraph 97)

19.  Mandatory reconsideration will be a success if it results in a reduction in unnecessary appeals to HMCTS. We are however concerned that its introduction may deter claimants who were likely to have been successful in their challenge from appealing, because the new dual process is more onerous. We recommend that the Department monitor claimant behaviour, to evaluate whether the policy is having this undesired effect, rather than fulfilling its intended purpose of ensuring a correct decision is reached more quickly and without needing to go to appeal. (Paragraph 98)

20.  We recommend that the Department works with the Office for National Statistics to ensure that official statistics on the operation of mandatory reconsideration are published as a matter of urgency. These should include: volumes of reconsiderations received and processed since the policy was introduced; the outcomes of these reconsiderations; the overall impact on ESA outcomes; and the length of time it is taking for reconsiderations to be completed. (Paragraph 100)

21.  We acknowledge that DWP often needs to seek additional evidence as part of the reconsideration process, which can be time-consuming, and we agree that it is better for mandatory reconsideration to take a little longer if this results in the correct decision being made. However this should not be an open-ended process and we do not accept that either of these factors preclude DWP from introducing a reasonable time target for completion of reconsideration. The introduction of a time target would also help to drive better performance. We therefore recommend that DWP introduce and report against a reasonable time target for the completion of mandatory reconsiderations. (Paragraph 102)

22.  We believe that it is inappropriate that those who have been determined by DWP to be fit for work and who have asked the Department to reconsider the decision are ineligible for assessment rate ESA. Although these people may be eligible to claim JSA, many are reluctant to do so because of the accompanying conditionality requirements. There has also been a problem with some Jobcentre advisers not being aware of the flexibility to modify the attached conditionality appropriately for these claimants. Assessment rate ESA and JSA are the same amount of money, so there is no financial saving for the Department from the policy, and it may in fact cost the Department money due to the administrative burden of moving claimants from assessment rate ESA to JSA during reconsideration, and then back to assessment rate ESA if they decide to appeal. We therefore recommend that claimants deemed fit for work following the WCA process who have requested that the Department reconsider that decision be paid ESA at the assessment rate until they receive the reconsidered decision. (Paragraph 109)

Appeals process

23.  We welcome the introduction of more extensive feedback from appeals through the provision of summary reasons by tribunal judges. However it is critical that this feedback is used effectively by the Department to improve the initial decision-making process. We recommend that, in response to this report, the Government set out how it plans to handle the volume of information it is now receiving through summary reasons, and how it will analyse and use it to improve the initial decision-making process. We further recommend that feedback from summary reasons is also shared with the new provider of the face-to-face assessment, so that it can be used to evaluate how assessments could be improved. (Paragraph 113)

24.  We welcome the efforts to streamline and speed up the appeals process by increasing the capacity of the Tribunals Service, and introducing direct lodgement and a target time for DWP to submit its case to the tribunal. We were, however, surprised to learn that documentation is exchanged between DWP and the Tribunals Service in hard copy through the post, given the Government's emphasis on the benefits of using the internet for public services. There is clearly further scope for increasing efficiency and improving the service for claimants making an appeal by introducing an online appeal application form and enabling electronic transfer of documents between DWP and the HMCTS. We appreciate that there will be an initial cost, but the return in terms of speed and efficiency would be worthwhile. We recommend that the Government set out the action it intends to take in this respect in response to this Report. (Paragraph 119)

Interaction between ESA and employment support

25.  There is a gap in the current system which means that a claimant's employment support needs are not being properly assessed as part of the ESA claims process. In particular, claimants should not be found "fit for work" where they would only be able to enter employment if significant adaptations and support were provided. We recommend that DWP urgently reassess where in the process an assessment of health-related employment barriers could most appropriately take place—either by reintroducing the Work-focused Health-related Assessment (WFHRA) as a second stage of the WCA, or at a later stage as an extended version of the Work-focused Interview once the claimant is referred to Jobcentre Plus (or to the Work Programme). In the meantime, we endorse the recommendation made by both independent reviewers, that information obtained through the WCA process should be shared with Work Programme providers and JCP employment advisers. (Paragraph 136)

Redesign of the ESA and WCA process

26.  We agree that an assessment of work capability of some sort is necessary for an out-of-work benefit paid on the basis of ill health and disability, and that eligibility should be based on functionality and not diagnosis. We also agree that this assessment should seek to distinguish between claimants who are unlikely to be able to return to work in the long-term, and those who, with the right support, could return to employment. Nor do we under-estimate the scale of the task involved in determining eligibility for an incapacity for work benefit, which is claimed by millions of people, with a vast range of conditions and disabilities, which may change over time and which affect individuals in different ways. (Paragraph 144)

27.  However, the current ESA system is not working as well as it should, particularly in terms of achieving the intended employment objectives for claimants. The ESA outcome groups are too simplistic: the WRAG has become a "catch-all" group for those claimants who do not meet the narrow criteria for being placed in the Support Group, but who are not fit for work. The conditionality attached to the WRAG, and the focus on moving into work in a relatively short period of time, means that this group, as it currently operates, is not appropriate for many of these claimants. Nor does the current WCA provide an accurate assessment of a claimant's individual health-related employment barriers, or their distance from the labour market. (Paragraph 145)

28.  We recommend that the Government undertakes a fundamental redesign of the structure of ESA outcomes. This should focus on identifying changes to the assessment process, to ensure that the health barriers to employment that an individual faces are properly identified. For claimants in the WRAG, proper account needs to be taken of where they are on the spectrum of readiness for work. Work-related conditionality should be matched to the identified employment barriers. The support made available to help the individual move closer to work should be tailored more closely to their individual circumstances. It may be possible to use the different prognosis periods for when a claimant is expected to be fit for work as the basis for varying the conditionality and accompanying support. The redesign process will require a considerable amount of research, and will take time, but sufficient resources should be devoted to it to ensure that a new design is in place before the new multi-provider contract is tendered in 2018. The redesign will also need to take account of the implications for ESA of the introduction of Universal Credit. (Paragraph 146)

29.  The descriptors used in the WCA, and the way they are applied in the current points-based assessment, are not producing accurate outcomes of functional capacity in the workplace in many cases. The Evidence Based Review was a useful process, but more needs to be done to evaluate the effectiveness of the descriptors and to make them more responsive, particularly for claimants with progressive and fluctuating conditions, and those with mental, cognitive and behavioural difficulties. We recommend that the redesign of the ESA process includes a fundamental reassessment of the effectiveness of the design and application of the descriptors used in the Work Capability Assessment. (Paragraph 147)

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Prepared 23 July 2014