DWP accused of 'rewarding failure' over 'extortionate' benefit assessors payouts
Private companies carrying out controversial assessments for disability benefits are set to bank millions of pounds more than was budgeted for in their contracts, new figures suggest.
Labour accused the Department for Work and Pensions (DWP) of "rewarding failure" by Atos and Capita, which appear set to be paid more than £700 million for their five-year contracts.
This compares with an original estimate of £512 million for the contracts to carry out assessments for personal independence payments (PIP).
The DWP said the assessment process for PIP is key to supporting claimants, and it has to balance effective support for the most vulnerable with getting the best value for the taxpayer.
Analysis by the Press Association shows Atos and Capita have already been paid £578 million in relation to PIP since it launched in 2013.
This includes £257 million in 2016, the highest year so far, according to the department's monthly spending data.
But the three original call-off contracts for this work totalled £512 million.
This figure was supposed to cover a five-year period, according to the original contract documents.
The contracts are due to run out in December.
With DWP having paid Atos and Capita an average of £19 million a month over the past two years, the companies are set to be paid in excess of £700 million by the time the contracts hit the five-year mark.
Shadow work and pensions secretary Debbie Abrahams said: "It is beyond belief that this Tory Government is rewarding failure.
"The PIP process is in disarray and these private companies are receiving huge payouts in a time of extreme austerity.
"It is clear that these costs are spiralling out of control.
"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 payouts by DWP totalled £198 million in 2015, £91 million in 2014 and £7 million in 2013, the year PIP launched.
Figures released for January and February 2017 show the companies have been paid a further £25 million this year.
Atos won two of the three original tenders - a £206.7 million contract to carry out assessments in the North and Scotland, and a £183.9 million contract for London and the South.
The other £121.6 million contract for assessments in Central England and Wales was won by Capita.
More than 160,000 people initially denied PIP have had this decision overturned since the benefit launched in 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."
A separate £59 million contract for PIP assessments in Northern Ireland is devolved to the Northern Ireland Executive and is not recorded in DWP data.
The original DWP contract tender suggested the four contracts would be worth between £480 million and £680 million.
Liz Sayce, chief executive of Disability Rights UK, said: "If Government is spending an extra £200 million on the companies carrying out PIP assessments we need to ask why.
"But we also need to ask if this is a good use of taxpayers' money at a time when over 50,000 people have had to return their Motability cars and the Government has made it more difficult for those with serious mental health conditions to qualify for PIP."
A Capita spokeswoman said: "We were selected through a rigorous procurement process by the Department for Work and Pensions (DWP) to undertake personal independence payment assessments in line with DWP's clearly defined service specification.
"W e provide these reports to the department who, alongside considering all other evidence submitted by a claimant, make a decision on whether to award a benefit, and if applicable the level of such an award.
"We are paid according to the number of quality controlled assessments we complete for DWP."
Former work and pensions secretary Stephen Crabb blamed officials for under-estimating the number of claimants and therefore the cost of the contracts.
He told BBC Radio 4's Today programme: "I think that is probably a fair criticism that could be levelled at the Department for Work and Pensions. With some of the benefit reforms that have happened over the last five, 10 years - it goes back to the Labour days - it hasn't been very good at getting its forecasts right.
"If the payments being made reflect the actual economic cost, then I think that is a fair contract.
"What we don't want to see is companies being rewarded for failure and certainly there have been operational problems with the way these contracts have performed, and companies have been made to feel the heat from that."