NAO: DWP fit-to-work contractor "still not meeting expected performance levels"

National Audit Office says Department for Work and Pensions has improved oversight of Employment and Support Allowance tests - but warns of "perpetuating cycle of optimistic targets, contractual underperformance and costly recovery"

By Josh May

08 Jan 2016

The contractor conducting "fit-to-work" tests on disabled people is failing to meet performance targets, despite increasing costs, the government spending watchdog has said.

The National Audit Office (NAO) has published a report saying the Department for Work and Pensions' (DWP) oversight and management of the tests for Employment and Support Allowance (ESA) had improved since the contract was taken on by US firm Maximus.

But Maximus was “still not meeting expected performance levels”, the NAO said, as costs rise to an average £190 per assessment from £115 under previous provider Atos, which pulled out of the contract after questions over its performance.

The total cost of the tests to the government is now £579m over three years, while the reduction in benefits being paid out has dropped to £400m.

The watchdog found the DWP had reduced the backlog of cases to 280,000 as of August last year, but the contractor was “not on track to complete the expected number of assessments for 2015 and has missed assessment report quality targets”.

"The Department has addressed some of its immediate operational issues in managing contracted-out health and disability assessments but now needs to take action to break a perpetuating cycle of optimistic targets, contractual underperformance and costly recovery,” said Amyas Morse (pictured), the head of the NAO.

"The Department is paying more for assessments, but providers are still not meeting expected performance levels. 

“The Department needs providers to complete the planned number of assessments so that it can achieve the significant benefit savings it expects to make over the next few years."

Labour has labelled today’s findings “yet another example of incompetence”.

“This report highlights the shambles the Tories have made of outsourcing health and disability assessments,” said Debbie Abrahams, the shadow minister for disabled people.

“The independent experts at the NAO have rightly shown that under this government the system, like so many other projects, is stuck in a cycle of underperformance.”

The DWP said: “We are determined to support more people into work and provide individuals who can't with the correct support that they need - the effective assessment of people's abilities is key to this.”

Meg Hillier, the chair of the Public Accounts Committee, said taxpayers had been “left to foot the bill”.

“The department’s approach has been unclear, its targets untested and consistently missed and future delivery is under threat,” she added.

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