Committee of Public Accounts

Press Notice No. 16 of Session 2003-04, dated 1 April 2004


Mr Edward Leigh MP, Chairman of the Committee of Public Accounts, said today there had been welcome improvement in the system for the medical assessment of benefits, with reductions in backlogs and quicker processing of cases, but that the thousands of successful appeals each month were still a matter of concern.

But there is much more to be done. I am particularly concerned that there has been no significant change in the number of appeals lodged against decisions over eligibility for these benefits, and over 40% of these are successful. The Department must improve the performance of doctors and decision makers, for example through providing regular feedback on the outcome of appeals.

Mr Leigh was speaking as the Committee published its 16th Report of this Session, which examined the extent to which performance had improved since the Committee examined medical assessments of eligibility for incapacity and disability benefits in 2001, and whether the Department for Work and Pensions and Schlumberger could carry out medical assessments more efficiently. Incapacity and disability benefits costing over £18 billion a year are paid to some of the most vulnerable members of society. Part of the test of eligibility for these benefits is a medical assessment. Some of the evidence for these assessments is provided by claimants' own doctors, but over one million medical reports a year are provided under contract. In 2001, the Committee found that bottlenecks throughout the system were resulting in delays in paying some benefits and continued payment to people who were no longer eligible, and a highly variable quality of service to claimants. The Department contracted with SEMA Group in 1998 and the Group was subject to an agreed takeover by Schlumberger Medical Services in April 2001. The Department is due to let a new contract in August 2005.

The Committee found that since 2001 performance has improved in many aspects of medical assessment. The Department has taken action in relation to all of our earlier recommendations. New performance targets have been set and met, or are on track to be met. Schlumberger has halved the number of substandard medical reports and the number of complaints against them has reduced steadily. In some areas, our recommendations have been implemented but have not yet fed through into service improvements.

The Department has improved the time taken to process medically-assessed benefits, but performance in poorer offices needs to be brought up to the standard of the best. For Incapacity Benefit, the backlog of examinations, which had reached 368,000 cases in 2001, has almost been eliminated, saving the taxpayer £29 million in payments to those no longer eligible for benefit. For Disability Living Allowance and Attendance Allowance, improved processing times means that in 2002-03 customers received their benefit on average 5-6 days earlier than in 2000-01, but there is still a 25% difference between the best and worst offices.

Pilot Incapacity Benefit reforms have led to further reductions in the time taken to carry out examinations. The Department should make these levels the norm. Schlumberger have reduced the average time taken to carry out medical examinations from 52 days to 30 days, which has contributed to an annual cost saving of £21 million. On the basis of evidence from Incapacity Benefit reform pilots, the Department consider it is possible to reduce this further to 15 days, which would result in further financial savings as ineligible customers are identified quicker.

The Department should determine the unit cost of processing benefit claims to improve its management of the decision-making process. The Department cannot allocate and manage resources efficiently without knowing the full cost of assessing medical benefits.

The re-tendering of the medical services contract should be used to seek further service improvements and more innovative ways of delivering medical services. The Department needs to encourage bidders to make better use of information technology and to gather medical evidence more effectively from a range of sources. Investment in improving IT systems should be a criterion for selecting the winning contractor.

The Department should assess the risk that a significant proportion of decisions are incorrectly overturned at appeal. If so the Department will need to improve the training of appeals tribunal doctors and provide for more systematic review of their work.

It is difficult to see how doctors and decision-makers can improve their performance if they do not know the outcomes of the cases they examine. The Department should provide regular feedback on decisions reached and on the results of appeals; speed up implementation of systems to improve the quality of medical evidence; and consider raising the standards used to assess the adequacy of medical reports.

The calibre of the doctors conducting examinations is crucial and the Department and its contractor should enforce rigorous standards. The Department should act swiftly to identify and, where necessary, remove those who fail to reach the necessary standards of care.

The Department must understand better the causes of non-attendance and introduce measures to address them. The Department has put in place measures to deter non-attendance, but not all non-attenders are deliberately avoiding an examination. The Department and Schlumberger should identify and deal with those who are avoiding examination. But they should also make it easier for others to attend by for example, rethinking where examinations take place and improving the accessibility of medical examination centres.

Improvements should be made to medical assessments for specific groups, such as those with mental health problems. There is evidence that people with mental health problems experience greater than average difficulties in attending examinations, being assessed and getting a fair hearing. The contractor's doctors should be trained to recognise and deal with customers with mental health problems.

Mr Leigh said today:

"There has been welcome improvement in the system for the medical assessment of eligibility for incapacity and disability benefits. The Department for Work and Pensions accepted all of our previous recommendations and, with its contractor Schlumberger, has been working to implement them. For Incapacity Benefit alone, £50 million of taxpayer's money is now being saved each year through a reduction in backlogs and improved processing times.

But there is much more to be done. I am particularly concerned that there has been no significant reduction in the thousands of appeals lodged each month against decisions and that 40% of these appeals are successful. The Department must improve the performance of doctors and decision makers, for example through providing regular feedback on the outcome of appeals."

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