From The Guardian, 27 March 2014 (story by Haroon Siddique).
Atos will receive no compensation and has made ‘substantial financial settlement' to DWP for early termination of contract
The contract with Atos to administer millions of fit-for-work tests for sick and disabled people a year is ending early, the government has announced.
The £500m agreement to carry out work capability assessments had been due to end in August next year but following widespread public and political anger over the tests, which have been criticised by MPs and campaigners as crude and inhumane, the agreement will now end early next year.
There has been mounting evidence that hundreds of thousands of vulnerable people have been wrongly judged to be fit for work and ineligible for government support. The Department for Work and Pensions (DWP) said that the decision had been reached after “joint negotiations” with Atos. Ministers had been in private discussions with the company since the summer over the quality of its operation but if the government had terminated the contract it would have been faced with a penalty payment.
Mike Penning, the minister for disabled people, said:
“The previous government appointed Atos as the sole provider for carrying out work capability assessments and since then we have carried out several independent reviews and made significant improvements to the assessment.
“Today we are announcing that we are seeking a new provider to replace Atos, with the view to increasing the number of assessments and reducing waiting times.
“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, Atos has made a substantial financial settlement to the department.” The DWP said that, to ensure a smooth transition, one national provider would be appointed early next year to take over the contract. In the longer term it intends to move to multiple providers to increase competition. Last month, the Guardian revealed that the government was preparing to oust Atos from the contract on the basis of a leaked review, which suggested the DWP was lining up rival firms to take over the agreement. Ursula Morgenstern, Atos chief executive for UK and Ireland, 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.”
Last year the work and pensions select committee said the government's handling of the assessment was damaging public confidence and causing claimants “considerable distress”.
The committee said the problems with the computer-led, points-based assessment “lay firmly with the DWP”, but added that the department was failing to apply “sufficient rigour or challenge to Atos”.
More than 600,000 appeals have been lodged against Atos judgments since the work capability assessments began, costing the taxpayer £60m a year. In four out of 10 cases the original decisions are overturned.
Charities welcomed the exit of Atos but warned that the entire system needed overhauling.
Richard Hawkes, chief executive of the disability charity Scope, said:
“The test should be more than an exercise in getting people off benefits. It should make sure disabled people get the specialist, tailored and flexible support they need to find and keep a job.”
Steve Winyard, RNIB head of campaigns and policy, said Atos's departure “might be welcomed by some but it leaves blind, partially sighted and other disabled people in a very uncertain situation. DWP will face lots of questions but it also has an opportunity to re-examine the whole process.”
Richard Kramer, deputy chief executive at the deafblind charity Sense, called for root-and-branch reform.