DWP criticised for handing outsourcers extra £630 million

04 July 2019 Consultancy.uk 7 min. read

The furore over outsourcing benefit tests for sick and disabled people has once again reared its head, with the UK Government being pilloried for handing the professional services firms involved an extra £630 million, despite a sea of complaints. The Department for Work and Pensions has subsequently been accused of showing “disregard” for “appalling inaccuracies” by the firms running PIP and ESA assessments.

Employment and Support Allowance (ESA) is a British welfare payment for adults younger than the State Pension age who are having difficulty finding work because of their long-term medical condition or a disability. It is a basic income-replacement benefit paid in lieu of wages, and is currently being phased out as part of the controversial Universal Credit roll-out. Personal Independence Payment (PIP) – which replaced Disability Living Allowance (DLA) as part of the Welfare Reform Act 2012 – is a benefit that helps with the extra costs of a long-term health condition or disability for people aged 16 to 64.

While the two ultimately meet different needs, both have been heralded by disability rights campaigners as being essential to ensuring a healthy and dignified life for adults with long-term health issues and disabilities across the UK. Advocates argue that ESA and PIP are so important, in fact, that the increasingly difficult procedures for accessing these social security measures are linked to thousands of deaths all over the country.

Backing this up, statistics released by the Department for Work and Pensions (DWP) in 2015 revealed that between December 2011 and February 2014, 2,380 people died after their claim for ESA ended because a work capability assessment (WCA) found they were found fit for work. While this has continuously provoked sharp public outcry, by January 2019, further figures revealed 17,070 disability claimants had died while waiting for decisions on their PIP claims since 2013. A quarter of those were suffering some form of cancer, while 270 had anxiety or depressive disorders. The main disability was not recorded in half of all cases.

DWP criticised for handing outsourcers extra £630 million

At the heart of the seemingly endless saga is the Government’s outsourcing policy and a series of lucrative contracts with private firms which have allegedly been maintained without regard for performance. ESA assessments have been delivered since October 2014 by a firm called The Centre for Health and Disability Assessments (CHDA) – whose parent corporation is US outsourcing giant Maximus. Meanwhile professional services firm Atos delivers the majority of PIP assessments under the name Independent Assessment Services (IAS) through a contract it has held since 2013, alongside Capita.

All three have been routinely criticised by the Work and Pensions Committee regarding their performance. In late 2017, an unprecedented public response to an inquiry by the Committee included thousands of individual accounts of medical assessments that ranged from frustrating to gruelling – something reinforced by oral testimony from claimants and advocacy groups during following evidence sessions. Frank Field, Chair of the Commons Work and Pensions Committee, suggested vulnerable people had been “pushed to the brink of destitution” by the contractors’ handling of the scheme.

Despite the mounting scrutiny, the DWP handed the contractors larger pay-outs rather than reining them in. The total spend on Atos and Capita’s contracts saw a 19% increase on 2016’s figures, as the DWP spent its highest amount on PIP since its launch in 2013. The figures came after The Press Association revealed in 2017 that Atos and Capita were set to be paid more than £700 million for their five-year contracts – against an original estimate of £512 million – prompting accusations that the DWP were “rewarding failure.”

Now, as reported by The Daily Mirror, the UK Government has further strengthened its relationship with Atos and Maximus, handing the private firms a combined £631.1 million extra to test sick and disabled people for benefits. The contracts were extended until July 2021 without going to tender, and documents quietly released in May revealed that extending Atos' PIP contract by two years could cost taxpayers up to £394.7 million, while the ESA contract – run by a Maximus subsidiary – may cost up to £236.4 million for a 16-month extension. Capita’s PIP assessments contract is also being extended, but talks are on-going over the details.

“High standards”

While initial investigations by the press into the news prompted the DWP to remove the figures from its website, citing “inaccuracies”, a DWP spokesperson has since spoken with The Daily Mirror to confirm the data was in fact accurate. However, they stressed it was important to understand that the price tag is a maximum budget, and may therefore end up being less.

The spokesperson said, “These figures refer to the previously announced extensions of the PIP and HDAS contracts to 2021, and not to any additional extensions or new costs. We’re committed to providing the best possible service for disabled people, which is why we’re continually improving the assessment process for PIP and ESA. We regularly monitor our assessment providers to ensure they are delivering against the high standards we expect.”

Spokespeople from Atos' IAS and Maximus’ CHDA were both keen to defend the contracts, meanwhile. IAS stated that it is “absolutely committed to providing a professional and compassionate service for every claimant”, and will “also make continuous improvements.” CHDA meanwhile claimed that since taking over the service “we have fundamentally improved the experience for those we assess,” similarly vowing to work in partnership with charities and disabled people’s organisations “to improve the service further.”

Despite the conciliatory tone struck by the companies, the news still riled opposition figures and disability rights champions. Genevieve Edwards of the MS Society branded the extensions a "kick in the teeth" for people claiming PIP for the condition, adding she had been told “all too frequently” that assessors lacked a basic understanding of multiple sclerosis and their process fails to “capture the reality of living with it,” before labelling the move to extend the PIP and ESA contracts “nonsensical… when what is really needed is an overhaul so people don't have to fight to get the support they need."

Labour's Shadow Minister for Disabled People Marsha De Cordova meanwhile lambasted the move, arguing, "It is scandalous that hundreds of millions of pounds more have been handed over to private companies, such as Atos and CHDA, that are wreaking havoc on disabled people’s lives. By extending these contracts, this Tory government has once again shown its disregard for the appalling inaccuracies of outsourced assessments for PIP and ESA, which have had a devastating impact on so many disabled people.”