Ministers have come under fire after it emerged that private contractors would be paid millions more for providing controversial disability benefit assessments.
Atos and Capita are set to receive £700m for assessments for Personal Independence Payments (PIP) – considerably more than the £512m oiginally budgeted for the five-year contracts.
Research from the Press Association shows the two firms have already been paid £578m since PIP launched in 2013, with an average monthly payment of £19m over the past two years.
The assessments for PIP have been dogged by controversy, with 160,000 people successfully overturning decisions that they were not entitled to PIP, which was brought in to replace Disability Living Allowance.
Shadow work and pensions secretary Debbie Abrahams hit out at the payments, saying: “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.”
But the former Work and Pensions Secretary Stephen Crabb said the mistake was in the DWP underestimating the number of claimants who would need to be assessed.
He told BBC Radio 4’s Today programme:
“You’re talking about millions of assessments being carried out, so these are big contracts, big numbers involved and let’s just, for the sake of clarity, emphasise that this isn’t profit we’re talking about, we’re talking about payments for work carried out. If the number of claimants has been higher than what was predicted at the time of the original contract – and that’s what’s happened – then the payment to these companies will be higher.”
Mr Crabb said it was fair to criticise the department for getting its numbers wrong.
“Yeah, I think That’s probably a fair criticism that could be levelled at the DWP, with some of the benefit reforms over the last 5-10 years – and it goes back to the Labour days – it hasn’t been very good at getting its forecasts right, I think that is a fair criticism.”