Reposted from the Guardian
Oh look it’s my favourite lady, Margaret Hodge wagging her finger at Atos again!
The outsourcing giant Atos, one of two firms tasked with rolling out a new benefit for sick and disabled people, has been accused by a committee of MPs of misleading the government over how quickly it could process claims that has led to the distress of thousands of claimants.
The chair of the public accounts committee, Margaret Hodge, said the firm had submitted a tendering document to administer personal independence payments (PIP) which claimed there were agreements in place to work with hospitals and physiotherapy centres.
However, evidence obtained by the committee showed the document had “deliberately misled” the Department for Work and Pensions (DWP), she said.
Hodge also accused the DWP of turning a blind eye to discrepancies in Atos’ submission as civil servants rushed to find a way of implementing one of Iain Duncan Smith‘s new benefits. The DWP permanent secretary, Robert Devereux, denied they had done so.
The meeting follows a damning report from the National Audit Office (NAO) which showed last month that sick and disabled people trying to claim the new benefit are facing “distress and financial difficulties” because of mismanagement by civil servants, Atos and Capita.
The NAO discovered the new payment, which will replace the disability living allowance, will cost almost three and a half times more to administer and take double the amount of time to process.
At the committee hearing, Hodge said the committee had seen tendering documents submitted by Atos for London and the south of England in which the company committed to working with 16 NHS and 25 private hospitals and 653 physiotherapy practices.
Hodge read from the document, which claimed there were “contractual agreements” in place, and said: “In fact, only four hospital trusts agreed. In the contract document, you misled the DWP over where you were, didn’t you?”
“You should not have said that you had contractual agreements with trusts. You have only managed to work with a quarter of the trusts you named in the document. Isn’t that a lie?”
The senior vice president for health at Atos, Lisa Coleman, said: “We did not lie in that tender document. We corresponded with the suppliers and they were happy for us to name them.”
Coleman added that one of the problems with assessments has been an underestimation of the length of time it will take for each one to take place. She said: “We needed to double the capacity expected because assessments are taking twice as long as we expected.”
The committee also condemned Atos for misleading the DWP over the time it should take for claimants to get to assessment centres set up by the firm from their homes. About 40% of claimants take longer than an hour to travel to the assessment centres, the firm disclosed. The tender document submitted by the firm said that the centres were spaced widely enough that nearly all claimants would arrive within an hour.
The information submitted by Atos was later used by Lord Freud, the benefits minister, in parliamentary answers he gave when questioned about the suitability of Atos for the contract, Hodge said.
Devereux, asked about how the department had checked the tendering document, conceded that civil servants had not checked Atos’s system “end to end”.
Hodge also questioned why Atos was even considered for the PIP contract given that it had faced damning criticism and had contracts cancelled over the implementation of employment support allowance.
“It is a very similar contract, on a very similar area. What on earth was going on there? Why give them another chance?” she said. “This is the worst advert for using private contractors to deliver private services. It is awful.”
Devereux replied: “We were making a decision on the bids in front of us.”
The DWP had budgeted to pay £200m to administer the new benefit but pays Atos and Capita £127m to conduct face-to-face consultations or paper-based assessments.
The NAO report shows that within six months of the introduction of PIPs in some areas of the north of England in April 2013, a backlog of 92,000 cases had built up, almost three times the number expected. The DWP had made decisions in only 16% of the expected number of cases, the report states.
Poor operational performance in the early stages of Duncan Smith’s flagship programme have forced his department to stagger the full national roll-out of PIPs and increased the risk that it will not deliver value for money in the long term, the NAO found.
Atos was singled out for criticism in the report. In October, the DWP postponed the rollout of the benefit because of fears that Atos could not reduce backlogs or manage higher volumes of cases.
Contractually, assessment providers should complete 97% of assessments within 30 days. By the end of October, Atos and Capita had completed 55 and 67% respectively, the report states.
Claimants were waiting an average 107 days – and terminally ill patients 28 days – for a decision on their cases, an NAO report has found, rather than the predicted processing times of 74 days and 10 days respectively.
Delays in assessments have cut by £140m expected savings over the course of this parliament, with the DWP now forecast to save £640m a year by 2015, rather than its prediction of £780m, said the NAO. However, the DWP still expects to achieve annual savings of £3bn by 2018-19, with 3.6m claims assessed by 2018.
Each new PIP claim – worth between £21 and £134 a week to disabled claimants – costs an average £182 to administer, compared with £49 under the disability living allowance, the report states.
Atos submitted a tender supply information form on May 2nd 2012 to the DWP, as the French firm bid for four PIP contracts worth £127m a year – it eventually won two.
The document shows that the firm had claimed to have established a network of 1,738 consultation centre sites across Britain which meant that claimants would be at the most one hour away from an assessment.
“Their location, in particular the NHS hospitals, is often at the centre of established transfer links, meaning that between 75% and 90% of claimants will be less than 30 minutes travel time from a consultation centre, with the remainder only 60 minutes away,” it said.
The document implies that Atos had already sought and been granted access to accomodation. “Each partner has contractually agreed to providing accommodation to the required specification,” the submission says. Hodge claims this was misleading.
The submission document claimed that across Lot 3, covering London and south east England, Atos could deliver assessment centres in 56 NHS, 25 private hospital and 653 physiotherapy practices. “This creates a network of nearly 750 sites across Lot 3 (as shown in the diagram below) within which claimants can attend a face-to-face consultation. In virtually all areas, there is coverage by more than one supply chain partner, creating additional capacity and contingency,” the report claimed.
This, Hodge said, was grossly misleading.