DWP scraps Atos contract

27 Mar 14
The Department for Work and Pensions has terminated its contract with private firm Atos to undertake controversial fit-for-work assessments of people receiving incapacity benefits.

By Richard Johnstone | 27 March 2014

The Department for Work and Pensions has terminated its contract with private firm Atos to undertake controversial fit-for-work assessments of people receiving incapacity benefits.

Disabled people minister Mike Penning today announced the department was seeking a new provider to replace Atos in the Work Capability Assessment programme after concerns were raised about the decisions being made.

The announcement follows long-standing criticism by MPs of the tests used by the firm, which determine if claimants are fit for work and therefore not entitled to incapacity support, known as Employment and Support Allowance.

In a written ministerial statement today, Penning said he took action last summer to review the contract with Atos ‘when we identified significant quality failures in the written reports produced by Atos following assessments’.

Following negotiations with the firm, the government had reached a settlement for Atos to exit the contract before it was due to end in August 2015, he added.

‘I am pleased to confirm that Atos will not receive a single penny of compensation from the taxpayer for the early termination of their contract, quite the contrary [because] I can also confirm that Atos has made a substantial financial settlement to the Department for Work and Pensions.’

The new contract will learn from the mistakes of the last deal, he said, which was originally signed by the last Labour government. It will be awarded later this year, Penning said.

‘We have negotiated an agreement covering the remaining term that is more robust, with an agreed performance regime that gives us confidence delivery goals will be achieved. It is that same commercial rigour that will underpin the new procurement for these services that I am announcing today.

‘My absolute priority for the new provider will be to deliver the best service possible for claimants, increase the volume of assessments carried out and reduce waiting times. In the meantime, we will focus on delivery of assessments for those making new claims and those who have changes in their condition.’

In addition to continuing to provide the assessments until a new supplier is in place, Atos will also remain the provider of separate assessment for the Personal Independence Payment benefit in two regions.

The firm confirmed the exit from the Work Capability Assessment contract.

Chief executive Ursula Morgenstern said: ‘We are pleased to have reached an agreement with the government to allow us to exit this contract early and we remain committed to delivering essential services to the UK government as a strategic supplier.

‘Our team will work hard to support transition to a new provider and we believe that we have reached a settlement that is in the best interests of all parties.’

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