Discredited firms poised to rake in more than £1 billion from new PIP contracts

Ministers are poised to hand more than a billion pounds to discredited private sector outsourcing giants so they can continue to provide disability benefit assessments for another three years.

The plans will apparently see a huge rise in spending on the discredited personal independence payment (PIP) assessment process.

The existing contracts with Atos and Capita to carry out PIP assessments are due to run out at the end of July 2021.

Although it is not certain that the two companies will bid for, and secure, the new contracts, they are in a strong position to do so, despite their poor track record since they began delivering PIP assessments for DWP in 2013.

Ministers made it clear last week that the new contracts would last just three years, with the Department for Work and Pensions (DWP) planning to develop a new system for delivering all disability-related assessments through a single digital platform.

New providers could be unwilling to bid to take on such high-profile and troubled contracts for just three years before a major shake-up which will lead to all assessments being carried out by a single organisation, with the possibility of DWP even taking the contracts in-house.

Disability News Service (DNS) has seen Prior Information Notices (PIN) issued by DWP last week, which provide detail on the imminent tendering process for contracts to provide both the PIP assessment and work capability assessments (WCAs) for three years from August 2021.

The WCA is currently provided by another discredited outsourcing giant, the US-based Maximus.

Although the documents show that the cost of the WCA contract has also increased, the PIN for the PIP assessments contract suggests ministers are budgeting for a much steeper rise in costs.

In 2016-17, DWP handed £255 million to Atos and Capita to carry out PIP assessments across England, Scotland and Wales.

But the Scottish government is set to take on responsibility for all PIP assessments in Scotland from next month.

The PIN says that the new contract is worth an estimated £1.06 billion over three years, to provide PIP assessments only in England and Wales.

This suggests payments of about £353 million a year* to provide PIP assessments in England and Wales only in 2021-22, 2022-23 and 2023-24, compared with £255 million in 2016-17 to provide assessments across England, Wales and Scotland.

DNS spent months investigating allegations of dishonesty by PIP assessors in late 2016 and throughout 2017, hearing eventually from more than 250 disabled people in less than a year about how they had been unfairly deprived of their benefits, with such cases still continuing to come in more than three years after that investigation began.

Last September, DNS revealed that PIP claimants were now almost twice as likely to win their tribunal appeal than DLA claimants were a decade ago.

And figures released by DWP this year show that both Atos and Capita are still failing to meet key targets for the quality of their assessment reports.

The other PIN says the contract to provide WCAs for three years from August 2021 will be worth an estimated £500 million* over three years.

This is likely to be offered in just one contract, and will cover England, Scotland and Wales.

Maximus, which is in prime position to win the new contract, is already set to receive an estimated £227 million for the 18 months from February this year to July next year, at about £12.5 million a month, compared with about £14 million a month for the three years from August 2021 that will be offered through the new contract.

Maximus has itself been at the centre of repeated claims of poor performance, allegations of falsifying the results of WCAs and unsafe practices during assessments, and even links to the deaths of claimants, since it took over the WCA contract from Atos in 2015.

DWP refused to explain how it justified such a significant increase in the value of the new PIP assessment contracts, after being asked to comment by DNS.

*These figures are estimates because some of the payments depend on how many assessments the contractor is asked to carry out

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