Atos wins £400m deals to carry out disability benefits tests | Guardian.co.uk | 2 August 2012

From The Guardian website, 2 August 2012 (story by social affairs editor Rendeep Ramesh.

Firm unexpectedly wins two contracts despite disquiet over handling of work capability assessment, while G4S misses out

Atos, the firm that runs the work capability assessment designed to encourage people to move off benefits and into employment, has won contracts worth more than £400m to test whether disabled people should continue receiving benefits.

The Department for Work and Pensions (DWP) announced the award of three contracts in England and Wales, with Atos unexpectedly winning the lion's share of the work. The smaller of the three contracts, covering Wales and parts of central England, was won by the outsourcing company Capita.

The government will replace the working-age disability living allowance (DLA) with a new personal independence payment (PIP), from next year and aims to cut spending by 20% over the next three years. DLA, which pays out a maximum of £130 a week, is a welfare payment designed to help people look after themselves and aimed at those who find it difficult to walk or get around. The government says that in eight years the number of people claiming DLA has risen by about 30%, from 2.5 million to 3.2 million, with the annual cost now £13bn. Ministers argue that there are no checks on who gets the benefit, hence the need for an assessment system.

There has been much disquiet about Atos over its existing government contract to test whether the long term sick should continue receiving benefits.There have been accusations of widespread inaccuracies in the medical reports used to help determine whether individuals are eligible for sickness benefits.

This week Prof Malcolm Harrington, who was appointed by the government to review the work capability assessment, told BBC's Panorama that the test was “patchy” and needed improvement.

The biggest corporate loser appears to be G4S, which had begun its own tests with disabled people two years ago and hoped to be awarded a number of contracts. The final stages of the award process came in early July, when details of the debacle over Olympic security began to emerg

G4S is still in line for two smaller contracts – one in Northern Ireland and the other a national trial. These are worth about £200m in total, industry insiders estimate.

Richard Hawkes, chief executive of the disability charity Scope, said the tests were deeply flawed.

“Just this week the government and Atos, the contractor that carries out its fitness for work test, have come under a great deal of criticism about how this assessment is being delivered to disabled people. Yet in less than a year from now, disabled people could have to go through two deeply flawed assessments in the same month to get the essential financial support they need to live their lives.

“Disabled people are incredibly anxious and afraid that the switch from DLA to PIP is just an excuse to cut the support they need. The decision about which private company will run the assessment is of little significance to the thousands of disabled people who are just deeply worried about losing their financial lifeline,” Hawkes said.

Campaigners say achieving the level of saving required would mean cutting about 500,000 people from the benefit roll, which would lead to arbitrary judgments being made.

A spokesman for the charity Disability Rights UK, which lobbied the government to make the test fairer, said:

“We are looking to ensure all companies assessing disabled people sign up to principles to ensure the assessment process works as well as possible.

“Contracts are worth millions but are designed to remove support from thousands of disabled people and are likely to provoke strong feelings. This is especially among disabled people who have not had needs identified in other assessments. We hope DWP and contractors will work very closely with advice organisations like ours to ensure independent, expert information is available to all 2 million people going through the new tests.”

The government said that DLA reform was about “are in and out of work benefits”. When ministers proposed the reforms, the DWP argued “evidence suggests that DLA can also act as a barrier to work when it should enable people to lead independent lives, including having or getting a job”.

In a letter to charities, the DWP said:

“We've been very clear that the assessment must be consistent and of the same high quality throughout the country … providers will be working to the same legislative framework and criteria, which introduces a more objective, accurate assessment. DWP will be closely monitoring and auditing assessments to ensure their quality and consistency.”

• This article was amended on 2 August to clarify that Atos's contracts are to test whether disabled people should continue receiving benefits.