Atos Healthcare

Tom Greatrex Excerpts

Tuesday 4th September 2012 Westminster Hall

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mrs Riordan.

I am pleased that the Minister of State, Department for Work and Pensions (Chris Grayling) is here. I am not sure whether this will be his valedictory performance in that role, but I saw pictures of him going into Downing street earlier, and if he has been promoted to the post of Secretary of State for Justice, I would like to be the first to congratulate him. I remind him, however, that in that post he will be responsible for the tribunals service, which deals with appeals relating to the work capability assessment, so he will not completely escape responsibility for some issues that will be raised this morning.

I am conscious of the number of people present for this debate, which highlights the fact that although hon. Members may be consumed by events in and around Downing street today, many people outside are concerned about aspects of the work capability assessment and employment support allowance. I am sure that hon. Members will want to reflect those views and with that in mind, I shall endeavour to be brief. I shall take only a few interventions, to allow more Members to contribute.

There are three points on which we probably all agree: first, there are benefits in working. I have seen many of my constituents—although it is harder to do so now than it was a few years ago—return to work after long periods of unemployment. As well as any material benefits, the positive impact on their health and well-being is obvious. We should all encourage as many people as possible to work and get back into work if they have not worked for some time. Secondly, as most of us would acknowledge, helping and supporting those who have not worked for a long time can be difficult and time-consuming. It needs to be done sensitively, so that people feel helped and not as though they are being punished. Thirdly, although not everybody completely accepts this point, many feel that an assessment for those who rely on sickness and disability benefit is useful and appropriate. That was the envisaged purpose of ESA: to support those who can work into work, as well as those who sadly will never be able to work again.

Six months ago, I was fortunate enough to secure a debate on this issue in this Chamber. At that time, the Minister confidently predicted that the performance and situation would massively improve and some changes that had been made had not yet fed through. Six months later, I suggest to the Minister that the number of people present today indicates that very real concerns and problems remain, many of which are sure to be reflected during the debate.

In our previous debate, I focused on the experiences of constituents who had undergone the assessment. I told the story of a constituent trapped in the system who went through an assessment, a successful appeal, a reassessment, followed by another successful appeal and then another reassessment. For too many people, that remains the experience across the country. The Minister and whoever his successor will be need to look carefully at that issue and address it. I have spoken with many constituents who would love to go out to work, but it is not possible to do so because they suffer from a disability or a chronic condition, and I am sure that many Members in the Chamber will want to speak up for such people.

[Jack Dromey (Birmingham, Erdington) (Lab)]

I congratulate my hon. Friend on securing this debate on a vital public concern. He has spoken of his own constituents. In my constituency, Paul Turner, a manager and proud family man, contracted a serious heart disease. He was off work and although desperate to work, could not do so. However, he was told that he was fit for work and was denied benefit. As his wife says, he went into serious decline and died only weeks later. In the work capability assessment, his heart was not tested. Does that not demonstrate how fundamentally flawed the assessment process and its conduct by Atos are? Does my hon. Friend not agree that it is absolutely wrong in a case such as that for the Minister to refuse to refer it to the serious case review, so that profound lessons can be learned? Never again should anyone be treated in the way that Mr Turner was.

[Tom Greatrex]

My hon. Friend makes a powerful point. A number of cases could be cited that indicate the lack of comprehensiveness in the assessment process and the failure sometimes to incorporate other evidence to ensure that not as many people are wrongly assessed.

I want to concentrate on some contractual issues this morning, and I am sure that others, like my hon. Friend, will make comments about individual cases to illustrate those points. The work capability assessment must be tailored in the interests of both the individual and the taxpayer. Unfortunately, both are getting a raw deal from the system. It is true that the work capability assessment was introduced under the previous Government, which is a point that Government Members frequently make, as I am sure that they will today. It is also the case, however, that in late 2010 the contract with Atos Healthcare was amended, extending it to 2015, beyond its original conclusion date of 2012. The work capability assessment was rolled out to millions of people on incapacity benefit under this Government, despite pilot projects in Aberdeen and Burnley highlighting serious concerns. The Minister said during our previous debate—I paraphrase him slightly—that, in his judgment, the Government should get on with that process and try to work on the basis of the expert reviews as they were going on, rather than fixing it in the first place.

[Kevin Brennan (Cardiff West) (Lab)]

My hon. Friend is right to point out that the work capability assessment has been around for some time. For many years, I have been helping my constituent, Mr Robert Shafer, who was the victim of a poor assessment. Is my hon. Friend as concerned as I am that the chief medical officer of Atos is now Professor Michael O’Donnell? He was previously employed as chief medical officer by the American insurance company, Unum, which was described by the insurance commissioner for California, John Garamendi, as an “outlaw company” that has operated in an unlawful fashion for many years, running claims denial factories? Is that the kind of person that the Government should allow to be in charge of a work capability assessment system?

--- Later in debate ---

[Tom Greatrex]

My hon. Friend makes an important point about the organisation of the company contracted to undertake that work on behalf of the Department for Work and Pensions. I shall go on to make points relating to other legitimate concerns about Atos Healthcare that need to be addressed. In many respects, given that the cost of appeals has more than doubled in two years, from £25 million in 2009-10 to £60 million in 2011-12, the performance by Atos Healthcare has, in many ways, been extraordinarily poor.

[Wayne David (Caerphilly) (Lab)]

On appeals, does the fact that nearly 40% of the people who are initially unsuccessful are then successful on appeal not demonstrate a fundamental flaw in the work capability assessment process?

[Tom Greatrex]

The level of appeals and successful appeals indicates that, although no process is 100% accurate all the time, many decisions are wrong and need to be corrected through the tribunals service. No one should forget, however, that that process can take six to nine months because of the backlog of appeals. During that time, people suffer from severe anxiety and concern about their fate, so my hon. Friend makes an important point.

[Joan Walley (Stoke-on-Trent North) (Lab)]

This issue affects us all, in all our constituencies. The whole test is deeply flawed. Does my hon. Friend agree that, in the short term, we can advise our constituents that when they are undergoing the test, they can request that it be videoed, which would at least assist with further appeals? It has just been pointed out how much the appeals cost the taxpayer, so the Government are paying twice over for what is essentially a flawed capacity assessment.

[Tom Greatrex]

I thank my hon. Friend for her intervention. I am not unaware of what Atos says to people who seek to video their assessment, because cases have been highlighted to me in which people have asked for their assessments to be recorded. In the previous debate, the Minister said that if anyone wanted to have their assessment recorded, they could have it recorded, but that has not been the case in many instances and people are refused permission to record the assessment themselves. I would be interested to hear the Minister’s response to that point.

[Richard Burden (Birmingham, Northfield) (Lab)]

I am grateful to my hon. Friend for giving way again; he is very generous. He has hit on an important point about the interface between the appeal problems and Atos’s work. Is it not true that there is a weird revolving door now? People get an assessment, question it and wait ages for the appeal. They may or may not win the appeal, but by the time the appeal comes up, they have had another assessment and therefore they go through a revolving door of losing benefits. Something is fundamentally wrong and unfair.

[Tom Greatrex]

My hon. Friend touches on a very important point. When I raised it with the Minister at recent DWP questions, he indicated that, finally, some of the information coming back from the tribunals service would go to DWP decision makers, so that they were better informed. I will make this point now, so that the Minister can, I hope, respond to it. That started to happen in July. I want to raise the issue of the status of those reports and what impact they will have on people being called for further assessments. In particular, some tribunals now have a section at the end of that information that suggests that that particular applicant should not be reassessed within 12 months or 24 months. Is that something that the DWP is taking into account and appreciating before it calls people back? I ask that because my hon. Friend the Member for Birmingham, Northfield (Richard Burden) is exactly right: there are many cases of people who have been caught in this process, which is no good for their health and no good for taxpayers, because we end up paying again and again over time.

[Several hon. Members]

rose—

[Tom Greatrex]

I will take one more intervention. I apologise to everyone else, but I want to leave time for other hon. Members to make contributions. I give way to my hon. Friend the Member for Airdrie and Shotts (Pamela Nash).

[Pamela Nash (Airdrie and Shotts) (Lab)]

On the point about recording assessments, a constituent of mine was told recently that they could record the assessment, but only if they paid for a private, independent company to come in and do it. Obviously, someone who is living on benefits cannot afford that. I wrote to the Minister at the time about the issue. I wonder whether he can deal with the recording of assessments in his closing remarks.

[Tom Greatrex]

I thank my hon. Friend for her intervention. She has made a point to which I hope the Minister will be able to respond.

I will attempt to move on. Back in February, I wrote to the National Audit Office to outline concerns about the contract between Atos Healthcare and the DWP. The correspondence centred on two issues: first, a lack of efficiency in the use of public funds, to which I have referred, and, secondly, a lack of accountability inherent in the disbursement of those public funds. As the recent House of Commons Library note and many of the figures that I have received as answers to parliamentary questions over the past 18 months or so have confirmed, and as my hon. Friend the Member for Caerphilly (Wayne David) reflected, 41% of those found fit for work appeal the decision and 38% have their appeal upheld. For those who seek the advice and support of professional advocacy groups such as Citizens Advice, the appeal success rate is closer to 70%. Just last week, Kent’s largest citizens advice bureau indicated an appeal success rate of 95%.

The impact of what is happening is twofold. First, too many sick and disabled people are being found fit for work when they are not. They become entangled in a lengthy appeal process that can occupy up to nine months of their time. In many cases, even when the appeal is successful, the individual is placed in the work-related activity group and then they have to begin the whole process anew.

[Ann McKechin (Glasgow North) (Lab)]

Will my hon. Friend give way?

--- Later in debate ---

[Tom Greatrex]

I will not, because I need to make progress. I apologise to my hon. Friend.

The second impact of the high appeal success rate is cost. The cost to the public purse from appeals relating to the WCA was £60 million in 2011-12. That figure has more than doubled since 2009-10. It is almost 50% of the total yearly value of the Government’s contract with Atos Healthcare to carry out the assessments in the first place. In effect, taxpayers are paying for the process not to work, and then to correct it. Given the unprecedented pressures on the public purse, it beggars belief that the Government are apparently content to sit back and do very little to rectify that situation.

In oral evidence to the Work and Pensions Committee in June 2011, the Minister claimed that if the migration of those on incapacity benefit to ESA was successful, it would save money. He said that the aim is not a

“savings measure—it is not a financially based exercise, although clearly if we succeed it will save money”.

The Minister appeared to accept that an indicator of success was saving money, so does he accept that the significant increase in costs associated with the number of decisions being appealed—and being successfully appealed—shows that, on that measure, the Government have failed?

One measure that I and many others have been questioning is the imposition of financial penalties on Atos Healthcare to compensate for poor performance. In February, in response to my written question on whether the Government had considered imposing such sanctions, the Minister appeared to absolve Atos of the blame for the number of decisions overturned on appeal by saying that:

“it would not be appropriate to impose financial penalties on Atos to reflect the number of work capability assessments which are overturned on appeal.”—[Official Report, 22 February 2012; Vol. 540, c. 852W.]

I tried again in July by asking for a note of when penalties had been imposed and what their total value was, but that time, rather than absolving Atos of blame, he decided to protect the company’s commercial interests, replying with the frequent defence of “commercial sensitivity” as the reason for withholding that information. I find it difficult to understand how commercial sensitivity comes into play when we are talking about a single company that is paid from the public purse to carry out an exclusively public function on behalf of a Department. Transparency would help to ensure that there could be confidence in the system and to highlight where performance was not being properly managed. It is important that the Minister seeks to address that.

It was not until the NAO responded to me last month that some light was shed on the issue:

“We do not consider that the current contractual targets are sufficiently challenging, and in our view this allows the contractor to deliver a significant number of assessments before financial penalties become due.”

It continued:

“Our review also concluded that the Department has not sought adequate financial redress for contractor underperformance.”

One of the most concerning revelations from the NAO was that in only 10% of the cases in which financial penalties could have been imposed did the Government do so. That is astonishing. Given that the Government and the Minister quite frequently comment on the importance of value for money for the taxpayer—in some respects, I agree with that—it beggars belief that when there are opportunities to put that into practice, the Government have done so in only one in 10 cases.

I quote:

“In these times of tight budgets, we need to make sure the money we do spend is better spent. If we don’t we are failing disabled people and their families.”

Those were the words of the Prime Minister in 2009 at a conference on autism. In that same speech, the then Leader of the Opposition cited a NAO report that examined value for taxpayer money in relation to autism. I am sure that, even given his elevation today, the irony is not lost on the Minister.

There are many questions that the Minister must answer to account for the failure properly to manage the contract with Atos Healthcare. Why did he impose financial penalties on only 10% of the occasions on which they could have been triggered? What was the value of compensation clawed back from Atos Healthcare to reflect that poor performance, and what was that as a percentage of the cost to the public purse for the original contract and appeals? Does he agree with the NAO that targets that trigger financial penalties are not sufficiently challenging? What are the key performance indicators that the NAO described as insufficiently challenging? That is a particularly important issue.

On a number of occasions, I have attempted to gain clarity on what is expected of Atos in relation to customer service, the number of assessments conducted, the number of people found fit for work, targets, statistical norms and many other issues. The Minister has refused to be fully transparent, releasing a very limited excerpt from the medical services agreement with Atos that relates only to waiting times. As I said, maximum transparency is important to enable people here to hold the Government properly to account, and to hold Atos Healthcare, through the Department for Work and Pensions, properly to account for the work that it is undertaking in a very important area.

The NAO was also scathing about the Government’s failure properly to monitor the performance of Atos. According to the NAO, there is

“Limited routine validation of information provided by Atos Healthcare”.

It went on to recommend that

“the Department develop processes to validate key performance information supplied by Atos Healthcare.”

Back in February, in the previous debate on the issue, the Minister stated, with a certain degree of confidence:

“On capacity issues, as we stand here today, the incapacity benefit reassessment is on time. New claims for ESA have fallen a bit behind, mostly because of the introduction of the personalised statement…We discovered in the first few weeks that it took health care professionals…longer to complete the statement than expected, so the number of completed assessments dropped. That has changed. They have caught up again, and we are chasing through to clear the backlog, as we are doing with the appeals backlog”.—[Official Report, 1 February 2012; Vol. 539, c. 292WH.]

Unfortunately, the evidence does not bear out that assessment.

The target waiting time from when the ESA50 form is issued to the claimant to when Atos Healthcare completes the work capability assessment and hands the case back to the DWP is 35 working days—seven weeks. Between September 2009 and August 2010, the target was met with a clearance rate of 33 days, yet in less than two years, not only has the target not been met by an astonishing margin, but the time sick and disabled people have to wait for their assessment has risen by 85% to 61 working days, or more than 12 full weeks.

More than 20,000 people are waiting more than 13 weeks for a work capability assessment. The reason the Minister gave was:

“Atos Healthcare’s ability to deliver a service within the AACT was also impacted by the service volumes for this period which were significantly above departmental forecasts; in addition Atos had recruitment demands/challenges. These issues…resulted in an increase in the AACT.”—[Official Report, 9 July 2012; Vol. 548, c. 51W.]

Atos Healthcare receives more than £110 million a year to deliver a contract, but is unable to meet its recruitment needs to deliver it properly. That, at best, is an example of the underperformance and the level of failure due to which the Government should ensure that financial penalties are brought against Atos Healthcare. Such contractual failure feeds directly into the experiences that I am sure we will hear about in the remainder of the debate. Many people across the country have found themselves waiting an excessive time for their assessment. They are under pressure and feel hounded, and they may well wait a significant period for the appeal to follow. A degree of the chaos in the system is caused by the Government’s decisions and the failure to hold Atos properly to account.

This is not the first time that recruitment challenges at Atos have been highlighted as reason for failure. In December 2011, the Minister advised that a key Harrington recommendation would not be implemented beyond the pilot stage due to capacity pressures at Atos. In less than a year, the Government have twice cited the failure of Atos to recruit enough staff as the reason why those undergoing the WCA are being short changed, which gives rise to a question: if the Government are content to blame Atos, why has the Minister spectacularly failed to do anything about it? Why, in his answer to written questions, does he lambast Atos when waiting times increase, yet sit on his hands when it comes to making the company pay financially for its underperformance?

In 2010, the average WCA customer journey was 36 working days. That rose to 44 working days in the first half of 2011, and increased still further to 53 working days in the second half of 2011. Unfortunately, 2012 brought more misery for ESA claimants, as between January and May, the average customer journey increased to 64 working days, or just under 13 weeks. The Minister inherited 36 working days and transformed it into 64—an increase of 78%. It might seem that I am talking about the dry detail of contractual issues, but we see the defects at the heart of the process—the failure of the management of the DWP and the failure of delivery at Atos—reflected in the experiences of many people we represent.

I want to say a few words about the award of the £400 million contract for the personal independence payment in many parts of the UK to Atos Healthcare. A further criticism in the NAO review, which interestingly enough was dated the same day as the announcement of the PIP framework agreement, was about medical services contracting. The NAO stated specifically in relation to the PIP procurement process:

“Our review of existing arrangements concluded that the Department needed to make changes to secure effective leverage over future medical services contracts...we have recommended that the Department focus on reducing the barriers for new suppliers to making a sustainable entry to the medical services market, in particular addressing the current risk that a single incumbent supplier has significant cost advantage which makes delivery of a level playing field in the market more challenging”.

The NAO went on to lament the DWP’s

“dependence on a sole national supplier”

that has

“limited opportunities for routine assessment of value for money, for exercising contractual leverage and for wider market development.”

Like many Members in the Chamber who represent constituencies within the areas for which Atos Healthcare will undertake the PIP assessment process, I received a letter from Atos confirming that it had been successful in securing the contract. It included the chilling phrase that it had won the contract on the basis of its record delivering assessments for the Government over a period of years. This is a serious point, because as the PIP process is established, it is vital that some of the problems encountered in the WCA are not simply repeated. There is concern that there is an increasing risk that that will be exactly the case, given the chosen contractor.

Contractual arrangements, performance measures, penalty clauses, and monitoring and delivery failures are technical, dry and dull matters, especially when contrasted with the sometimes heartbreaking and tragic cases that I have heard about, not only from my constituents, but from many of those who have contacted me prior to the debate. Many of those experiences are due to the flawed delivery of the WCA and the record of Atos Healthcare.

Whoever is the responsible DWP Minister tomorrow afternoon, we need a process that works in the interests of taxpayers, and of individual claimants and applicants. We need a process that is comprehensive enough to encompass complex conditions and that recognises that it is a waste of time and money to keep reassessing people with progressive and incurable conditions, while also recognising the fluctuating nature of many other conditions—that people have good days and bad days. We need a process that appreciates the very difficult challenges of assessing mental health needs and that takes account of expert medical evidence much more fully than the current process, particularly in some of the cases we have heard about. We need a process that does not make blanket assumptions about the time it takes to recover from very serious illnesses, such as cancer, nor imposes blanket conditions as a result. We need a process that helps people who can work and does not hound those who cannot.

[Several hon. Members]

rose—