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The head of the National Audit Office, Sir John Bourn, today reported to Parliament that the Department for Work and Pensions and their contractor Schlumberger have improved arrangements for the medical assessment of benefit claims since the National Audit Office reported on this subject in 2001. They have improved the speed of processing, the standard of medical reports and the quality of service provided by Schlumberger. However, both parties could learn more from the results of appeals, work to obtain better evidence, and deal with overbooking appointments and customers failing to attend.

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Disability and incapacity benefits cost over £18 billion a year. Ensuring good quality medical evidence is an essential part of assessing eligibility for these benefits. The Department for Work and Pensions contract with Schlumberger to obtain medical reports to assist with assessments. Reports by the National Audit Office and, subsequently, the Public Accounts Committee highlighted areas for improvement in the speed of benefit processing, the quality of medical evidence, and the quality of service to the public.

In 2001 significant changes were made to the original contract and new targets introduced. Since then, targets for most aspects of service quality – waiting times, meeting special requests such as for same-gender doctors – have been met, and the number of complaints has fallen to fewer than one per 200 examinations. Following the introduction of targets, more rigorous quality control mechanisms and computerised support for the completion of medical assessments, the proportion of reports assessed as substandard has halved.

Processing times have also improved for all the benefits, which has impacted on costs. In 2001, there was a backlog of nearly 300,000 Incapacity Benefit cases where the recipient was due for a medical examination. This has now been reduced to under 40,000 cases, and the Department expect to eliminate the backlog in the next six months, resulting in a one-off saving to the taxpayer of £29 million. Cases are also being processed more quickly, saving a further £21 million a year. The Department are also processing claims for Disability Living Allowance and Attendance Allowance more quickly, which means customers get their entitlement sooner.

The number of successful appeals against decisions as a result of problems with medical evidence remains high, despite steps to improve the standard of medical evidence used to assess benefit claims. 54 per cent of appeals against decisions on Disability Living Allowance are successful, 47 per cent for Attendance Allowance and 43 per cent for Incapacity Benefit. The main reason for this is that appeals tribunals are given new evidence, but in some cases, medical reports underestimate the severity of customers’ disabilities. The Department’s decision-making and appeals processes are examined in more detail in a separate NAO report to be published next week.

Although most customers are satisfied with the service they receive from Schlumberger, about three per cent of customers who attend examinations – over 25,000 people a year – are sent home unseen. The main reason for this is that appointments are overbooked to cover the time wasted when customers fail to attend.

"I am pleased that the measures taken since my last report have resulted in significant improvements, especially as this means a better service for customers, who include some of the most vulnerable members of society. It is crucial that assessments are undertaken fairly and efficiently, while ensuring that benefits are paid only to those genuinely entitled to them. I look to the Department to do more to improve the quality of evidence on which decisions are based and to tackle the problem of people failing to attend examinations."

Sir John Bourn


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