Press Release - The Medical Assessment of Incapacity and
Disability Benefits
9 March 2001
In a report to Parliament today, head of the NAO Sir John Bourn
recognised that the outsourcing of the Department of Social
Security’s medical assessment service had reduced costs and speeded
up the turnaround of work. But the standard of medical assessments
and the quality of service to benefit customers need to
improve.
The service which provides medical evidence to enable the
Benefits Agency to assess incapacity and disability benefit claims,
was outsourced to SEMA Group in 1998.
The report’s main conclusions are as follows.
- Outsourcing has reduced the cost to the Department of operating
the medical assessment service (at a contract cost of £305 million
over five years it represents savings of an estimated 10-14 per
cent compared to the public sector alternative) and work has been
processed more swiftly.
- The quality of medical reports has been a cause for concern
since before outsourcing. The incentives and remedies in the
contract to improve quality are not as robust as those relating to
fast turnaround of cases, mainly because of difficulties at the
time of procurement in defining and monitoring medical quality.
Measures of quality have since been strengthened, but improvements
have yet to be fully delivered. Cost pressures have played a part
but the Department and SEMA Group are making efforts to improve the
situation.
- Better management of workloads by the Benefits Agency could
achieve estimated savings of
£40 million a year by cutting the time taken to process decisions
on claimants’ eligibility and reducing the backlog of cases
awaiting review.
- There is also scope to improve the quality of decisions by the
Benefits Agency: around one half of those whose Incapacity Benefit
is withdrawn appeal against the decision and two fifths of those
appeals are upheld.
- The treatment of customers at medical examinations is not yet
adequate: special attention should be paid to overbooking of
appointments (over 1000 people a month are turned away); and
improving doctors’ manner with claimants and their awareness of
disability and cultural issues.
- The assessment service currently faces a serious strategic
threat from the shortage of suitably qualified doctors available to
carry out the work part-time. The supply of general practitioners
is set to worsen before it improves.
Recommendations to the Department include:
- focusing management effort on the quality of medical
reports;
- giving further thought to using healthcare practitioners other
than doctors to carry out parts of the work;
- speeding up the processing of cases within the Benefits Agency,
especially of Incapacity Benefit case reviews, and reducing the
size of backlogs awaiting medical referral;
- linking financial incentives for SEMA Group to performance in
customer care, as part of any negotiations to extend the contract
to seven years; and
- ensuring that SEMA Group put in place programmes to comply with
the new positive duty on public authorities to promote race
equality.
The National Audit Office also pointed to wider lessons for
Government departments in outsourcing services, emphasising the
importance of assessing whether the proposed length of the contract
gives the supplier enough time to recover investment; and of
setting explicitly prioritised objectives with minimum
standards.
Sir John Bourn said today:
"This has been an innovative project for the Department
of Social Security, involving the outsourcing of a service which is
close to the department’s core business. The Benefits Agency
medical service was underachieving and operated within tight
resource constraints. Outsourcing has cut costs and speeded up the
processing of the work, but the Department, with SEMA Group, must
concentrate on improving the quality of assessments and customer
service.
"Bottlenecks and delays throughout the system for paying
these benefits also need to be addressed. The aim should be to
ensure that disability benefits are speedily paid to those entitled
to them, as well as reducing losses to the public purse from
payments to those who are no longer eligible for
benefit."
Notes for Editors
The Benefits Agency is the largest executive agency within the
Department of Social Security. It employs around 70,000 staff
around the country and is responsible for paying out more than £80
billion in benefits every year.
SEMA Group UK is part of a leading European services and IT
company specialising in consultancy, outsourcing, systems
integration and business recovery. In September 1998 SEMA Group UK
took over the running of the former Benefits Agency Medical
Service, which provides medical evidence to assist Benefits Agency
staff in making decisions on benefit claims.
Incapacity Benefit is the main benefit for people under state
pension age who are not in employment and who meet a threshold of
incapacity for work.
Press notices and reports are available from the date of
publication on the NAO website at http://www.nao.org.uk/ Hard
copies can be obtained from The Stationery Office on 0845 702
3474.
The Comptroller and Auditor General, Sir John Bourn, is the head
of the National Audit Office employing some 750 staff. He and the
NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 19/01
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