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Contracted out health and disability assessments inquiry


The Department for Work & Pensions uses health and disability assessments for a number of reasons, including to determine eligibility for both Employment and Support Allowance (ESA) and Personal Independence Payment (PIP) benefits claimed by 1.3 million people in 2014–15. In July 2014, the Department also introduced a voluntary occupational health assessment for those on long-term sick leave. Assessments are central to the welfare reform programme; by better matching support to needs and helping people back into work the Department expects to reducing benefit spending (£27 billion in 2014–15) by around £4 billion each year from 2018. The Department contracts out assessments to Atos Healthcare, Capita Health and Wellbeing and Maximus UK.

Over 3 years from April 2015 to March 2018 it expects to spend £1.3 billion on a total of 6 million assessments.

Historically, assessment providers have struggled to meet expected performance levels. During 2013 and 2014 significant claim backlogs developed for both ESA and PIP, and there were concerns over the quality of assessments. The Department and providers agreed recovery plans and the Department transferred responsibility for ESA assessments from Atos Healthcare to a new provider, Maximus UK. Since March 2015, it has adopted a new contract structure and now pays more for assessments.

This review considers whether the Department’s management of contracted-out health and disability assessments represents value for money. As the contracts covered are at different stages we examine how the Department has changed its approach to setting-up and managing contracts. The Department expects to significantly increase the number of assessments in the short-term and we consider how well the Department can address the associated risks.