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Coffee House

The weak contract worth £100 million

17 August 2012

6:05 PM

17 August 2012

6:05 PM

Moving people off sickness benefits and back into the workplace was never going to be an easy job. It’s a sensitive process dealing with all the grey areas that complex illnesses and disabilities throw up, and has always needed careful handling. But today ministers came under fire for the way they hold the company that carries out the assessments for fitness-to-work decisions to account.

The National Audit Office has identified weaknesses in the Work and Pensions department’s contract with Atos Healthcare, which carries out the work capability assessments. Comptroller and Auditor General Amyas Morse has written a letter to Labour MP Tom Greatrex, who is investigating Atos’ performance, saying:

‘We do not consider that the current contractual targets are sufficiently challenging, and in our view this allows the contractor to deliver a significant number of assessments before financial penalties became due.’

The NAO also criticises the department for failing to demand sufficient financial redress for Atos’ underperformance. In short, the contract – worth over £100 million a year – is not currently providing value for money.

Now, it’s worth remembering that the work capability assessment was set up under the last Labour government, and the contract with Atos was renewed in November 2010. A spokeswoman for Iain Duncan Smith made that point when she responded to the letter today, saying:

‘The contract has changed considerably since it was signed by the last Labour government – it continues to evolve as we have it under constant review. In 2010, the work capability assessment was not working properly and since then we’ve substantially improved it. It is a complicated area but we are committed to making it a success to ensure it is both fair and accurate for the user and value for money for the taxpayer.’

The DWP says it agreed improvement plans with Atos to speed up processing times for assessments in both 2009 and 2012. It has also made changes to the process for applying financial penalties, and is reviewing the contractual targets for Atos. Ministers will have a chance to explain this further when parliament returns from recess in September as Greatrex has a Westminster Hall debate scheduled on the Atos contract.

I argued last month that the work capability assessment process needs to be fit for purpose so that ministers can take pride in their efforts to bring those who are truly capable of returning to the workplace back into jobs while protecting the most vulnerable. They also need to demonstrate that they are holding Atos to account in the most rigorous way possible: this isn’t just a sensitive process, it’s an expensive one, too.

P.S My predecessor Pete Hoskin was also keeping a beady eye on this assessment on Coffee House. He pointed out the danger of the public turning against the system all the way back in 2010.

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