Bills rocket for firms running benefits system
CIVIL SERVANTS were accused last night of “rewarding failure” after new figures suggested that the private companies hired to carry out controversial assessments for disability benefits would bank millions more than was allowed for in their contracts.
The outsourcing giants Atos and Capita are on course to earn more than £700m from their fiveyear contracts, compared with an original estimate of £512m, analysis shows.
The firms were appointed to carry out assessments for personal independence payments, consisting of a series of questions which the government says are necessary to “balance effective support for the most vulnerable with getting the best value for the taxpayer”.
Atos and Capita have already been paid £578m since the assessment scheme launched in 2013, replacing the old Disability Living Allowance. The original £512m budget was supposed to cover a five-year period, according to the original contract documents.
The contracts are due to run out in December.
The Department for Work and Pensions (DWP) has paid Atos and Capita an average of £19m a month over the past two years, and the companies are now expected to earn in excess of £700m by the time the contracts hit the five-year mark, data analysts at the Press Association said.
Last night, Labour claimed the costs were “spiralling out of control”. Shadow Work and Pensions Secretary, Debbie Abrahams said: “It is beyond belief that this Tory government is rewarding failure.
“The process is in disarray and these private companies are receiving huge payouts in a time of extreme austerity.”
She added: “The government needs to get an urgent grip on these extortionate payments to private companies, especially at a time when they are getting more and more assessments overturned in the courts.”
The researchers said payouts by the DWP totalled £198m in 2015, £91m in 2014 and £7m in the launch year.
Figures released for this January and February show the companies have been paid a further £25m.
Atos won two of the three original tenders – a £206.7m contract to carry out assessments in the North and Scotland, and a £183.9m contract for London and the South.
The other £121.6m contract for assessments in central England and Wales was won by Capita.
More than 160,000 people initially denied payments have seen the decisions overturned since 2013, according to DWP figures, while Atos and Capita have been dogged by accusations of insensitive assessments.
A DWP spokeswoman said: “We are determined to provide claimants with the support that they need, and the effective assessment of people’s abilities is key to this.
“We routinely review our work to make sure that we focus our resources on the most viable options and deliver the most effective support for the most vulnerable in society, while also ensuring the best value for the taxpayer.”
The payments scheme has been controversial from the start, with the charity Macmillan Cancer Support claiming that delayed assessments had left at least 4,500 cancer patients having to wait to learn whether they qualified for help.
Most claimants are required to attend a face-to-face assessment by the contractors to determine their eligibility.
Work and Pensions Secretary Iain Duncan Smith has said the payments are part of a package of reforms that had helped “get Britain back to work”.