Public spending watchdogs are to launch a new investigation into
Atos Healthcare, the company that carries out controversial medical tests for
people claiming sickness and disability benefits.
The National Audit Office (NAO) move emerged as the Government
disclosed that Atos has been paid £754m for the tests since 2005. It has
also landed other government contracts, including IT work for the Home Office
and Highways Agency.
Lord Freud, the Welfare Reform Minister, revealed that annual
spending on the medical services contract had risen from £73.3m in 2005-06 to
£114.3m in the year to March. He said the increase in the budget is
due to a rise in the number of tests.
He was replying to a written House of Lords question this week by
Lord Alton of Liverpool, a crossbench peer who asked the NAO to
intervene. The NAO has told Lord Alton the extension of the Atos contract
to a new benefits regime for the disabled is “an area of interest” to it and it
has begun discussions with the Department for Work and Pensions (DWP).
Lord Alton said: “The Atos contract with the Government has become
like a licence to print money. Astronomical sums are involved. Worrying
questions have arisen about whether the terms of the company's tender have been
met; whether performance matches promise; and whether a project undertaken on
the pretext of giving value for money has done so. When millions of pounds of
public money is being diverted to private companies, it is crucial that there
is accountability, transparency, and public confidence. I welcome the NAO's
decision to scrutinise the Atos contract and think the Public Accounts
Committee should ask Atos and the DWP to appear before them."
Stephen Timms, Labour’s employment spokesman, said:
“This Government has been warned time and again to get a grip of this
contract, but the truth is Iain Duncan Smith [the Work and Pensions Secretary]
has let Atos spin out of control and the taxpayer and vulnerable people are
picking up the pieces. Anyone taking the Work Capacity Assessment
today is now eight times more likely to end up in a tribunal than a job
and the cost of those appeals has soared by 40 per cent in the last year
alone. Ministers have got to fix this mess – fast.”
The multinational firm, which sponsored last year’s
Paralympic Games in London, has been criticised by employment rights groups for
the allegedly harsh way it assesses the sick and disabled. Some 40 per cent of
people claiming incapacity benefit appealed against its rulings and 38
per cent of them were successful. Despite that, the company won a further
contract to assess the new personal independence payments for the
disabled. The Government has been criticised by MPs for allowing a virtual
monopoly to develop. But ministers insist that Atos only makes
recommendations about claims, with final decisions taken by the DWP.
Atos has said that it has met its obligations in delivering a
“complex and challenging contract” and implemented all the changes recommended
by the independent reviews .
More than 40 per cent of the reports carried out on disability
benefit claimants by the back-to-work assessor Atos are flawed and
unacceptable, according to an audit commissioned by the Government.
Following months of complaints about allegedly unfair and slapdash
decisions made by Atos, the Department for Work and Pensions audited
around 400 of the company’s written reports into disability claimants, grading
them A to C. Of these, 41 per cent came back with a C, meaning they were
unacceptable and did not meet the required standard.
The lowest grade does not necessarily mean the decision was wrong,
but that a serious error or omission occurred, such as no evidence to justify
the recommendations, or inconsistencies in the evidence provided.
The findings mean the company will be stripped of its monopoly on
deciding whether people with disabilities are fit to work. The DWP said the
poor quality of the company’s written reports were “contractually unacceptable”
and announced on Monday it would be inviting other companies to bid for fresh
regional contracts by summer 2014 to help reduce waiting times. Liam Byrne, the
shadow Work and Pensions Secretary, said: “This is a direct consequence of
three years of appalling contract management by Iain Duncan Smith.”
More than 600,000 of the 1.8 million assessments carried out by
Atos since 2009 have been the subject of an appeal, at a cost of £60m. Around
30 per cent of the appeals succeeded. Mark Hoban, minister for Employment,
said: “Where our audits identify any drop in quality, we act decisively … It’s
vital we continue to improve the service to claimants, which is why we are
introducing new providers to increase capacity.”
Richard Hawkes, chief executive of the disability charity Scope,
said: “It’s about time the Government told Atos to smarten up its act. But,
it’s also strikingly clear to disabled people that the whole £112m per-year
system is broken.”
A spokeswoman for Atos said: “Our priority is the quality of our
work and, following the recent audit, we quickly put in place a plan to improve
the quality of written reports.”