Latest Public Sector News

17.08.12

Benefit medical assessments criticised by NAO

The National Audit Office (NAO) has found “weaknesses” in the Government’s sickness benefit system due to underperformance and overly-easy targets for its main contractor, Atos.

The contract between Government and Atos covers fit-to-work medical assessments which assess whether people are eligible for Employment and Support Allowance (ESA).

Atos was paid £112m in the last financial year to carry out around 738,000 face-to-face medical tests on benefit claimants, but nearly four out of 10 appeals are upheld at tribunals.

The NAO criticised the Government for these errors and for only 10% of penalties triggered by poor performance being applied and added that the DWP's negotiating position has been undermined by “inaccurate forecasting” of the number of people likely to need a medical test.

MP for Rutherglen and Hamilton West, Tom Greatrex, asked the NAO to review the contract.

He told Radio 4’s Today programme: “Through the Tribunals Service, the appeals are costing about £60m a year so effectively we are paying twice to try to correct the mistakes in the initial assessments or the process that leads to the assessments and decisions.

“That isn't good value for money and this is a contract that really needs a lot more scrutiny to understand how effective it has been.”

The NAOs director Amyas Morse wrote to Greatrex explaining that without routine feedback on the rationale for tribunal decisions, it was not clear whether any changes in the medical process were needed.

Work and Pensions Secretary Iain Duncan Smith said: “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.”

A spokesperson for Atos said said it had worked very closely with the DWP on a “complex and challenging contract” to “fulfil all our contractual obligations”.

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