The firm that took over from Atos in the implementation of fitness-to-work tests is performing worse in key areas as costs continue to spiral, a report by the official auditors has disclosed.
Maximus took over the contract in March to carry out medical assessments of claimants for employment and support allowance (ESA), the replacement for incapacity benefits.
The National Audit Office (NAO) found that the number of completed assessments are still below target despite an expected doubling of the cost to the taxpayer of the contracts for disability benefit assessments to £579m a year in 2016/17
compared with 2014/15.
Auditors said that nearly one in 10 of the reports on disability benefit claimants have been rejected as below standard by the government. This compares with around one in 25 before Atos left its contract.
The average time to process ESA claims has been cut from 29 to 23 weeks but there remained a backlog of 280,000 in August. The provider is not on track to complete the number expected this year and has missed assessment report quality targets, the NAO said.
Debbie Abrahams, the shadow minister for disabled people, said the report exposed a “shambles”.
“Too many disabled people have been badly let down by these assessments and this research shows that it’s not only been costly for those who’ve been mistreated, but all taxpayers,” she said.
“It’s yet another example of incompetence from the DWP [Department of Work and Pensions], and a thorough overhaul of the system is desperately needed.”
Atos left its contract early following mounting evidence that hundreds of thousands of vulnerable people have been wrongly judged to be fit for work and ineligible for government support.
It was replaced in March by US firm Maximus, with the DWP seeking to improve the system by requiring more face-to-face assessments and setting tough targets.
At the end of June, just weeks after Maximus began its assessments, the DWP was forced to launch “an improvement plan”, the report said.
Auditors found that Maximus’s subsidiary CHDA was around 20,000 assessments short of its targets for face-to-face assessments in August, while the number of paper-based assessments for the same month was around 11,000 short.
Difficulties finding hundreds more qualified medical staff and rising salaries have helped pushed the average cost of each assessment up by 65% from £115 to £190 – meaning a total cost of £595m for the 3.4m assessments required by 2018/19.
The estimated cost of hiring and training staff has increased from £26,000 to £44,000 for a London-based nurse over the year to 2015, the report said.
Despite this increase in money, Maximus has struggled to maintain staff, auditors said.
These problems experienced by Maximus this year have forced the DWP to rapidly downgrade their own targets for the overall volume of assessments.
At the start of the year, the DWP and Maximus hoped for 1m assessments; by June, this had been changed to 980,000. In September, this target was downgraded again to 911,000. Auditors said this would be cut again before the financial year ends in March.
ESA targets are seven weeks from assessment to receiving a benefit. In August, this figure was revised to 23 weeks for each claimant, the report said.
Auditors criticised the way that DWP officials failed to pass on information to Maximus which could have improved their targets during the bidding process.
Maximus assumed that they would retain 95% of staff after one month. In practice, only half of those recruited were still in post after this time, auditors said.
CHDA told the NAO that the DWP did not challenge their assumptions despite being aware that only 70% of staff completed their training with previous providers.
Auditors said that despite almost doubling the size of its performance management team to 80 officials, the DWP “continues to struggle with setting targets and requirements with clear evidence” and failed properly to test bidders’ claims over staff recruitment and training.
“Recent performance shows the department has not tackled – and may even have exacerbated – some of these problems when setting up recent contracts,” it concluded.
Meg Hillier, the chair of the public accounts committee, said: “The department’s approach has been unclear, its targets untested and consistently missed and future delivery is under threat. With the annual cost of assessments now expected to rise to a staggering £579 million in 2016-17, taxpayers have been left to foot the bill.”
A spokesperson from the Maximus’ subsidiary, CHDA, said: “We have already significantly reduced the backlog of assessments that we inherited.
“We have also increased the number of healthcare professionals we employ and have already implemented new recruitment and retention plans in order to deliver high-quality assessments that are timely and fair. The investment and increase in staff is to support the higher proportion of face to face assessments we now carry out, as well as to meet the requirements of the contract going forward.
“We are confident about the future and remain fully committed to delivering a high quality service and an improved customer journey.”
A DWP spokesman said: “We welcome the NAO’s recognition that we have made significant progress to improve contracted-out health and disability assessments.
“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.
“To ensure that support is targeted correctly and that we achieve value for money, we operate a strict competitive contract tendering process and factor all costs into departmental spending plans. This also ensures that the quality of the assessments for claimants improves at the same time.”
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