Oral evidence: Contracted out health and disability assessments, HC 727

Oral evidence, 3 February 2016.

Witnesses

Robert Devereux, Permanent Secretary, DWP, Nicole Kett, Director for Health Services, DWP, David Haley, Client Executive, Personal Independence Payment, Atos, Chris Stroud, Divisional Managing Director, Capita, and Leslie Wolfe, General Manager, MAXIMUS UK, gave evidence.

Chair

Welcome to our second panel. We have in front of us Nicole Kett from the Department for Work and Pensions; we welcome back Sir Robert Devereux, permanent secretary at the Department for Work and Pensions; Leslie Wolfe from MAXIMUS UK; David Haley from Atos UK; and Chris Stroud, divisional managing director of Capita. So we have the three contractors that provide the service and the civil servants responsible for it. Looking at the NAO Report, we would acknowledge that one of the biggest risks was avoided and the handover when Atos withdrew from the contract went smoothly. Sir Robert—or maybe Nicole Kett—you must have been lying awake at night worrying that it would all fall over, but we recognise that that change in contract and the change in contractor happened, and the service continued. We also acknowledge that PIP assessments are now down to four weeks from a very high peak—the Minister was in the House every week at one point on this—so that is a welcome improvement, and terminally ill assessments are now turned around within five days on average. Those are clearly important improvements. We would say—we want to probe you on this—that ESA assessments are still quite long at 23 weeks. That is an average, but that is a long time for someone waiting for an assessment, and there are still longer-term risks about the sustainability of the contract, which we want to probe in today’s session. It is still difficult to assess—there is a quite a lot in this which Mr Mills will come in on—how individual contractors are assessed. There are quite different approaches on that. We are really most interested in how we are going to ensure, looking into the future, given the volume that is expected to go through—you heard about the issue of quality and volume. We are concerned about that too, because every wrong decision has a huge impact on an individual and is a cost to the taxpayer. Before we go into the main hearing, I want to put on record my apology. In recent media coverage of this issue, I misinterpreted a figure in the NAO Report, in the “key facts” section, on the percentage of accurate assessments. I said then that 13% of assessments were graded as low quality. In fact, what I should have said is that only 13% of report targets were being met. I refer to the NAO Report, page 16, which has it in writing, and page 21, where there is a graph explaining that in detail if anyone wants to clarify it. What I would like today—I say this particularly to you, Sir Robert—is not a fencing match. I say that to the contractors as well. This is a complex and important area of work. We want to have an honest and straightforward discussion of it. There have been huge problems in the past. All of us have a raft of cases in our constituencies, and we have a lot of testimony coming from people about their experience of this. What we also really heard from the first panel, but see locally as well, is that people are now very fearful of this process. At the very least, it should run well. Appointments should happen when they are supposed to, they should happen swiftly and the decisions should be accurate, but there is other room for improvement too. We hope to tease out what the issues have been, where there is room for improvement and how it will be delivered. It has got better, but there is still a long way to go. I will kick off by asking about Atos. David Haley could you explain why you left the contract and decided to go in 2014?

David Haley

At that time, a decision was taken that clearly the contract was not working for the people who were going through the process, it clearly was not working for the Department and it was not working for Atos, so we entered into joint negotiations to exit the contract early.

Chair

I understand that you made a payment to exit the contract early, because you broke your contract. Can you tell us how much you paid the Department to exit?

David Haley

That is commercially sensitive information. The NAO is aware of the payments and the structure of the exit termination clause.

Chair

But you did make a payment to leave, just to be clear?

David Haley

Right.

Chair

How many health professionals—you had some problems appointing health professionals, so I want to ask you about it, and then I will come to Leslie Wolfe. What were the issues around recruiting health professionals when you exited the contract? We understand that there were some issues there with getting the right people in and the numbers of people in. Is that right? I am talking to David Haley first about Atos, and then I will come to Leslie Wolfe of MAXIMUS.

David Haley

As part of the transition plan that was mutually agreed and put in place, there was an expectation to transfer across 700 full-time equivalent health professionals. We transferred across 748 full-time equivalent health professionals at the time of the exit.

Chair

At that point, were you at capacity for the number of health professionals? Did you have any vacancies because of the problems you had had?

David Haley

The number of health professionals at that time was complicit with the transition plan that we had in place that we had to—

Chair

But were you short of the total number of health professionals you needed at the time that you exited the contract?

David Haley

No.

Chair

So you had a quota of 748 places to fill, and you had 748 people in those posts?

David Haley

The quota was to provide 700 across the—

Chair

No, you are talking about a different thing, to be clear, Mr Haley. I am asking what your complement should have been when you were running the contract; you are talking about the agreement for the transfer. I am talking about when you were running the contract. How many of the health professional places that you were supposed to fill had you filled? Was 748 your total complement, or were there any vacancies?

David Haley

At the time of transition, no. We constantly ran the need to replenish health professionals who were leaving and bring them on board. In terms of being able to meet the volume agreed with the Department, we had the requisite number of health professionals.

Chair

What kind of numbers were you running at below the total number you needed in the last year or so of your contract? This has come up in evidence and we need to probe the fact that it has been sometimes been difficult to recruit. I want to come to MAXIMUS too, but could you answer that question, please?

David Haley

Attrition was always in excess of 25%, so we were always having to ensure that we had the number of health professionals in place. We were constantly in the marketplace looking for those health professionals. The transition plan agreed the volumes that had to be in place and that had to be delivered following the issues with backlogs, so the number of health professionals that we had was the number required to deliver that volume target.

Chair

So you were always running to catch up when you were delivering it.

David Haley

indicated assent.

Chair

Ms Wolfe, you have taken over this contract. How has it been for you? You have obviously taken on some people, but have you had a similar attrition rate and challenge with holding on to health professionals to do the assessments?

Leslie Wolfe

Yes. As you know, we took over on 1 March, and the Report reflects our performance—

Chair

We are talking about 1 March 2015, to be clear.

Leslie Wolfe

Initially, we did have difficulty attracting, retaining and graduating healthcare professionals at the rate we had anticipated, so we started to fall behind the volumes. We set out, of course, to meet all our contractual targets. We fully expected to meet volume and quality, and we had further ambitions to reduce wait times and improve the customer experience. Initially, we did have difficulty with retaining and graduating healthcare professionals, but since then we have taken a number of initiatives to improve on that. We have improved our retention and graduation rates from the 30% or so reflected in the NAO Report.

Chair

So you had a 30% retention rate, to be clear.

Leslie Wolfe

Yes, sorry. Initially, we attracted the right number, but they weren’t staying. We were not doing a good enough job at screening people and making sure that they really understood the role. We didn’t initially have access to the seasoned, most experienced healthcare professionals when we first started to recruit, because they were just transferring in or had not yet transferred in, so we needed to change the way we were screening and what kind of competencies we were looking for. We were also not really telling well enough the story of what the job entails for healthcare professionals, so we developed a video that we passed to our recruitment partners. We also increased the number of recruitment partners so that we could cast a broader net. We then began to start to attract much more suitable people who really understood the work and were keen to do work of that nature. Also, our more experienced staff began interviewing and also helped us with coaching and mentoring. The number of initiatives we needed to undertake to keep them so that they would not leave before they were graduated and so that they would be successful through graduation meant that we revised our training process and programme. We reduced the size of our training classes and added in one-on-one coaches and mentors. That is the kind of thing we did to keep the healthcare professionals and get them to a successful productivity level.

Chair

How many have you recruited in addition to the ones who came over from the Atos contract?

Leslie Wolfe

We have actually been keeping the people who transferred over with a fairly moderate—

Chair

How many have you recruited in addition to them?

Leslie Wolfe

In addition, 1,241 people have accepted offers with us and are still there. Of those, 364 are now accredited.

Chair

So you recruited that number, but only 364 are able to carry out assessments.

Leslie Wolfe

No, we have more than 1,200 in the team.

Chair

That’s including the Atos ones.

Leslie Wolfe

Including those who transferred over, so we’ve doubled our workforce of healthcare professionals. Most of them are now becoming productive and accredited. We are now being quite productive: we have actually just achieved our best month ever in terms of volume through-put.

Chair

We will come back to the volume in a moment, because obviously that is one of the crucial success criteria for the whole programme. I want to ask the contractors about how you approached the pricing of these contracts. I want to go to all three of you, because I know you do different contracts. Can you talk us through your approach? There has been a big jump in the cost of doing the assessments—from £115 to around £190, on average—so Capita, to give you a chance to speak, could you explain how you approached it for your area of the work? Then we can go along to David Haley and Leslie Wolfe.

Chris Stroud

We worked with the original assumptions that the Department gave us, and we have a completely open-book arrangement with the Department across our account in how we charge. We are currently in negotiations with the Department, so although I am happy to provide the information, because we are in a commercial negotiation I would need the agreement of Sir Robert to provide it to you outside this forum, in writing.

Chair

In writing would be fine, but how did you approach the costings?

Chris Stroud

In the original contract there were assumptions about how long it would take to do an assessment and how many assessments we would need to do. We worked through a complex algorithm, if you like, to work out how much we thought we could do each assessment for.

Chair

Did you get that costing right?

Chris Stroud

No, we did not.

Chair

What have you done since?

Chris Stroud

Since then, we have worked through all the assumptions again. We have looked over the experience of the past two years and, working with the Department, we have come up with a different set of assumptions that more reflect the time and effort involved in conducting good and balanced assessments.

Chair

Are you still doing home visits?

Chris Stroud

Yes, we are doing home visits. Since the start of the contract, we have done probably 64% home visits versus 36% to clinics. That changes month to month, but it is pretty much still as we were.

Chair

David Haley, what about Atos? I suspect that one of the reasons you left your contract may be because you had under-priced the assessments. Do you want to explain how you went about pricing them?

David Haley

The process around pricing for the PIP contract was that we secured two lots. It was not just the front-office health professionals who were required to deliver the face-to-face assessments. There was a huge back-office operation that needed to be in place for the admin and paper-based review teams. You have the MI teams scheduling and booking. You have the auditors and the mentors. There is clearly a lot of infrastructure required to run a contract of this size, as was said earlier, given how complex it is. It is a volumetric pricing contract under which we are paid for every assessment that we undertake, whether face-to-face or by paper-based review, but there are huge infrastructure requirements behind that to ensure that the service can run.

Chair

We will come back to that in a minute, because your contract was a lot cheaper than what MAXIMUS is now costing, which is about £190 per assessment. Leslie Wolfe, do you want to explain a bit more about how you got to that figure and what you are doing differently from what Atos did?

Leslie Wolfe

Certainly. First, it is difficult to compare our contract with Atos’s contract for WCA. They are very different. In our contract, for example, we are required to do about 75% face-to-face assessments. In a face-to-face assessment, it takes approximately 75 minutes on average for a healthcare professional to see someone and then write up the report, meaning that we will need many more healthcare professionals to hit the 1 million target that was set for us. That meant we needed to hire a lot of healthcare professionals. It was an assumption-based contract in many respects. We had a lot of experience from other operations and other programmes, so we set a number of assumptions around how we would attract and recruit enough people, train them and mentor them and when they would graduate and become productive. It is quite a complex modelling process in which you anticipate when you are going to be able to get people from zero to two, to four, to six assessments a day. That was the structure we built it on. As I mentioned, the NAO Report only covers us at five months in, which is right at the height of our staffing and recruitment, so all our experienced members are actually coaching and mentoring and doing one-on-ones with people. They are not actually producing the assessments. It was initially taking us longer to graduate people, so the experienced workforce was being drawn down. Initially, on a per assessment basis, it is going to look like it is much more costly because we are not yet pushing the volume through. We are still in that ramp-up phase. Unfortunately, that is taking longer than we had hoped. The other expenses are just around salaries. What we thought would be the greatest risk for us in the contract was attracting healthcare professionals. We did a market survey of staff and in order to attract doctors and nurses and physios into this type of work we wanted to ensure that we were attracting them at market rates. We did boost salaries, particularly for doctors and a little bit for nurses, to ensure that it was attractive. The salaries are higher, but what you are mostly seeing in the first five months is just that. Unfortunately, we had a lot more people than you would expect for the volume that we were producing. Over time, what you will see is much more value for money on a per assessment basis.

Chair

As you heard from the previous panel, money isn’t everything, but we are here to watch the taxpayers’ pound and money is very much at the heart of what we do. We are all taxpayers, I guess. David Haley, what we are hearing from MAXIMUS is that if they are having to pay professionals more to keep them and to get the right calibre in, it sounds like Atos did it a bit on the cheap. Did you fall down on that aspect of your contract?

David Haley

As I said earlier, the contract was not working. It was outdated. It was not working for the people coming through the process, for DWP or for Atos. That is why it was agreed to terminate early.

Chair

We have heard some clear testimony that there were real concerns about the quality of many of the assessments. A lot of the evidence we heard not only from the first panel, but from elsewhere related to your time running the contract. Do you acknowledge that there were problems with the quality of the assessments and with the qualifications of some of the medical assessors doing the work for you?

David Haley

There was certainly an identified quality issue in 2013. We worked collaboratively with the Department on the issue that was identified. A lot of work went into that at the time to understand exactly what changed and what the issues were. A lot of work was done to rectify that quality issue at the time. We heard earlier about the stress levels of the people coming into this, and clearly, it was a very stressful time for people going through that assessment. The quality issue that was identified exacerbated that, so we worked very closely with the Department to rectify it.

Chair

So you acknowledge that there was a quality issue in your contract that caused stress to the service users—the individuals going through the assessment.

David Haley

I think previous Reports found that there was an identified quality issue.

Chair

We like to call a spade a spade in this Committee, and we are grateful when people acknowledge problems. You acknowledge that, and that is perhaps a small comfort for some of the people who have been through it. I am going to hand over to Nigel Mills, and then I will come back again.

Nigel Mills

Ms Wolfe, under your contract, where does the risk sit if costs start to escalate? Does it sit with you or does it get passed back to the Department?

Leslie Wolfe

Risk associated with not meeting targets?

Nigel Mills

No, with costs escalating. If you have to pay higher salary bills than you were expecting, does that get passed back to the Department, or do you incur it?

Leslie Wolfe

The way that the contract is structured, we have a budget that is based on bottom-up costs. Beyond that, there is a loss-gain share if we go over the budget.

Nigel Mills

What’s the share?

Leslie Wolfe

For year one it was 20:80, and for year two it was 50:50.

Nigel Mills

Which way was the 20:80?

Leslie Wolfe

We would share 20% in year one, and we would share the gain if we were under budget. We would receive a 20% share of the savings if we were under budget, and the Department would bear 80% of that cost. It was determined that year one would be the most risky year, because it would be the year of growth and scaling. After that, the contract is structured so it is 50:50.

Nigel Mills

What was your experience of that in reality, rather than in your forecasts? Were you glad that you had a risk share?

Leslie Wolfe

The risk for us was on service credits. The biggest risk for us was not meeting our volume and quality targets. That is where the incentives are built. All of our tension is on making sure we meet our volume and quality targets, as well as meeting timeliness on smaller benefits. That is where the real risk lies for us, and rightly so. We had to repay for the service credits where we didn’t meet our volume and quality targets.

Nigel Mills

Quite rightly. So you aren’t seeing a need to go back to the Department to say, “The cost estimates we used are so way off that our 50:50 risk share is going to make this unviable for us”?

Leslie Wolfe

No, we haven’t done that.

Nigel Mills

And you’re not planning to do that.

Leslie Wolfe

No. It’s not a cost issue for us; it’s a performance issue. We needed to get the right number of people to a productive level. We’re now producing the volumes, and we feel very confident about year two. Month after month, we’ve continued to improve on our volume throughput and quality.

Nigel Mills

Do you perhaps feel that you made some mistakes when you bid for this contract in assessing how fast you could ramp it up? Do you think the Department led you down a blind alley and tricked you into agreeing to some things that were never really possible?

Leslie Wolfe

It was definitely an assumption-based contract. Obviously, as a supplier, we are going to ask for allowable assumptions in the negotiation in case we get it wrong. Some things you get in a negotiation, and some things you don’t. We are also a provider, and there is an expectation on the Government side that we should know our business. We owned the assumption at the end of the day, and we signed the contract. In hindsight, do I wish I had an allowable assumption for that one? Yes, but the good news is that we’ve now remedied our processes, training and throughput. We’re at a place now where we’re keeping 82% of our new healthcare professionals. That’s where we hoped to start, so we made it; we just didn’t make it in time.

Nigel Mills

The NAO Report tells us some of your rival bidders withdrew because they knew they could not meet the million assessments in the first year. I sense you will not make that million target in this first year. Do you feel that the contract should not have been let, requiring that unrealistic target?

Leslie Wolfe

We knew this was going to be a risky contract. We felt the risk was in the recruitment, but we always knew this was an ambitious programme. We always knew when we started off that it would take 12 to 18 months to turn this around and transform the service, improve wait times, clear the backlog and improve customer service. It is unfortunate that we are not going to make our volume targets, most of all for our own reputation and for our service and the aspirations we had.

Nigel Mills

Can I ask a similar question to Mr Stroud? You hinted that you had been trying to reset or renegotiate your contract or something. Do you feel you entered into a contract that was not sustainable by your fault, or do you think you were led astray a bit by what the Department specified?

Chris Stroud

No, I think we have a similar experience to Ms Wolfe in that we listened to the assumptions of the Department and we worked out our own assumptions. We entered into a contract with the Department, we recognise that we have a duty of care to deliver against that contract and we have been doing that since.

Nigel Mills

Do you feel with hindsight that some of those assumptions were never realistic in the first place?

Chris Stroud

When we entered into the contract, the idea of an allowable allowance, or an allowable assumption, was not in place at the time. Given where we were at the time, we entered into the contract in good faith and we have delivered against that contract in good faith ever since.

Nigel Mills

Okay. Volumes being hit is not something that we see very much of in these contracts and we have had a series of them. We had the original ESA where we were nowhere near the volumes, we had the PIP stuff where we were incredibly nowhere near the volumes, certainly at the start, and now we have a new ESA contract and we are nowhere near the volumes in the first year. When you guys bid, don’t you think these volume targets are unrealistic and that you should try to tender on a more sensible set of assumptions?

Chair

I will bring in the contractors and then Sir Robert Devereux. Leslie Wolfe, do you want to go first?

Leslie Wolfe

From a volume point of view, under our contract we are save harmless if the volumes are not there, so there is protection if there is not sufficient volume. It is a challenge not having the volume exactly where you want it and where your staff are, but there is some protection for us if it is beyond our control.

David Haley

Assumptions need to be made at the beginning of any benefit—particularly PIP, which was a brand-new benefit. Some assumptions were made and our reaction to that was to build in some tolerance around those expected assumptions. I think it has been proven that some of those key assumptions were then found to be not sustainable at the beginning of the contract. It is difficult with any new benefit where you have to work with your experience but also try to understand exactly what can be delivered at a time when the workload can be 100% new benefits and new claims, which is always very difficult to forecast.

Nigel Mills

When you bid for the PIP contract, you had had several years of the ESA contract, so perhaps your organisation, unlike Capita and MAXIMUS, in the UK at least, knew how difficult these assessments were and how difficult it was to recruit people to do what I accept were slightly different assessments but not that different. Perhaps you should be a little more regretful that you made a horrible over-assessment of what volume you could generate.

David Haley

I think, as I say, using that experience as you have pointed to is invaluable to help you understand that some of these assumptions will end up not being reality. But once a new benefit and a new contract is let—this is why a tolerance was put in place at the time. It is important to balance the quality of the assessment and the volumes required to meet targets, which is always a very complex balance. I think that working with the assumptions was basic practice; that is what you have to do. And I think we used our experience at least to apply some level of tolerance to those assumptions and to a brand-new benefit, which we clearly found, once we went into it, was going to cause some challenges around those assumptions.

Chair

Quite some challenges, I think, to your reputation. Sir Robert Devereux, could you come in on this?

Sir Robert Devereux

You started with some general-ish remarks about how things have improved, which is kind. However, coming back to the point you just made, I think there are two different things going on in these contracts. So, when Mr Mills says that we aren’t delivering the volumes, let’s just parse that a bit. In the PIP contract, the last time I was here, we clearly were not delivering the volumes, which is why we had backlogs. The Report makes perfectly clear that the contractors have now got on top of that and we are now delivering in reasonable time, and we are not sitting on backlogs. So I think I could reasonably say that the volumes in the PIP contract are working.

Nigel Mills

So, the expected volume you had for this year in the contract you are actually hitting, or you are hitting a completely new expected volume that you reset at some point?

Sir Robert Devereux

No. The position is as the contractors are describing—this was a new benefit. I remember coming and explaining last time that the thing that we were assuming, just as you did just in a moment in an aside, was that these are broadly similar assessments, so the process should take about the same time. In practice, it turned out that the PIP assessment was taking longer. In the very early period, nobody really knew whether that was a learning curve problem and eventually as a professional you would speed up, or whether it was systemic. When it became apparent that it was taking longer, it took a while for the contractors then to recruit more people to make sure they got on top of it, but as things stand today we are doing enough volume on PIP fast enough to make sure that we are not sitting on backlogs of any kind. The story, I think, on the WCA is a different one. What I think that you have just heard Leslie say is that the assumptions that she made that lay behind the, “Yes, we can do a million”, are assumptions that she is now meeting but she did not meet them in the first few months. So, again, I think I would argue that in just the same way that you have acknowledged that performance is improving, each of these contracts is on an upward trend.

Chair

Just to clarify, Leslie Wolfe, you seemed to indicate that by the end of year two, you would be on target with the volume and on the quality of the assessments that you’re doing. You have made that commitment in public. Have I misunderstood you, or do you just want to repeat that? You said that you are getting to the point of reaching all your targets by the end of year two. Did I interpret that correctly?

Leslie Wolfe

We will not, unfortunately, make our volume target for our first contract year. We can’t make up for—

Chair

Not the first year—year two.

Leslie Wolfe

For the second year, yes, I feel very confident for the second year, because—I mean, just in January we just cleared over 75,000 and that puts us in good stead for our year two volume. Now, we’ve got a mature workforce and we don’t have to have that big map—

Chair

We return to these things as a Committee, so we may have to call you back to hold you to that. I hope that your prediction is right, because our constituents want it to be right, too.

Nigel Mills

I just want to get back to this theme of, “Are we setting realistic contracts?”, Sir Robert. I suppose the question is this: some bidders withdrew from the ESA contract, or at least one bidder withdrew from it, because they knew they couldn’t hit that million volume, so are you concerned that maybe you’re setting assumptions in these contracts that are too demanding or just not achievable, and therefore you’re not getting quite the range of bids that perhaps you had all wanted?

Sir Robert Devereux

I am not sure about that line of argument. I mean, it would be very easy for me to set very easy targets and I’d be awash with bidders, and by now I’d be sitting in front of you being told that I was paying too much for no output. The reality is that I need to be getting of the order of a million, which is why we asked the contractor to do it. I ended up with two bidders above the line to choose from. If some left, fine, but actually I had a healthy competition and I’ve got a healthy price for it—

Chair

You had two who remained in. How many originally expressed an interest? What’s the market like in this area?

Sir Robert Devereux

I can’t remember quite how many we—

Chair

Ballpark? Or perhaps Nicole Kett could either write to us or find out from somewhere—

Sir Robert Devereux

It won’t be a huge number, but the NAO has focused on the people that left—

Max Tse

There is a figure in the Report—on page 40, figure 13—which has some detail on the number of bidders who were invited to negotiate, and so on.

Sir Robert Devereux

Anyway, the point of my story is that if I thought I had strong-armed a reluctant contractor to sign, you would wonder what sort of contractor it would be if they were prepared to be strong-armed, but I actually got two of them in the room, and I am in a position to believe that. And it seems to me that since you want me to get value for money, and you want me to be on top of volumes and backlogs, then I should indeed press to get what the taxpayer and the Government need, and not settle for something lower just because it’s easier.

Nigel Mills

The reason I asked is that in a previous Report on this topic, one recommendation was that the Department should quite strongly challenge assumptions that contractors use in their bids to make sure those bids are actually achievable. Perhaps one example is when a MAXIMUS bid assumed a very low level of staff departure or a high level of staff retention that was presumably higher than Atos managed to achieve and turned out to be much higher than MAXIMUS managed to achieve.

Sir Robert Devereux

Not quite. The way you are invited to read the NAO Report leads you to that conclusion. What you just heard Leslie say is that they are now retaining more people than was the assumption that NAO has questioned. So they didn’t do, to start with, which is why, as Leslie has said, initially volumes were awry, but at the moment they are recruiting and retaining at a higher rate than the assumption that is being questioned. So when we had a conversation in the bidding process, we were testing why they believed they would be better at this than the previous contractor. They gave us some reasons. We went with that.

Nigel Mills

Can I ask you quickly, Mr Stroud, what is your retention rate like now?

Chris Stroud

Now, our attrition rate is approximately 4% a month. So our retention is a reverse of that number. We are recruiting and retaining people rather above where we have been in the past. Just to give you a bit of background, quarter one is our highest ramp-up period for managed reassessments. In quarter one 2015, we have achieved over 110% of our recruitment target and our attrition is tracking in single figures.

Nigel Mills

Four per cent. a month sounds like you lose 50% or 48% in a year.

Chris Stroud

In the past that would be the case. What we are seeing now is a much more improved performance against that. So, in January for example, we lost three people from our workforce.

Nigel Mills

That suggests that MAXIMUS is somehow a much more attractive place to work.

Leslie Wolfe

May I explain that? When I was referring to the 82% retention, that was for the first 90 days. It is the first 90 days when we all face the greatest challenge because people are just coming into the work and getting trained and certified. It is very difficult for people as adults to go through training again and then discover the nature of the work. That is when you are most likely to lose people. After the first 90 days, you lose just under 2% a month. So of our most mature people who have been with us, we lose about 2% a month which isn’t that different. Healthcare professionals have their choices in the market and we would expect some turnover

Chair

We heard from our previous panel and we have had quite a lot of evidence from the National Deaf Children’s Society, Sense, Mind in Greenwich and other places about the specialist assessments: people with very specialist situations, particularly mental health problems. In the generic training, are you properly taking account of complex mental health problems? Certainly in my case load, the biggest challenge is people with serious mental health problems who have a really rough time through this process. Perhaps we will start with Capita, then go to MAXIMUS and back to Nigel Mills.

Chris Stroud

Within the training programme we do focus on mental health issues and in our recruitment, in our teams, we have senior mental health clinicians working with us, both in a dedicated fashion and in providing support to the other assessors we have working for us.

Leslie Wolfe

We do not have generic training for all our disciplines so for doctors, nurses, physios and occupational therapists, there is slightly different training for all those disciplines because each one has different levels of training on musculoskeletal, mental health and various other health issues. It is tailored to the discipline. Beyond that, we have taken a number of initiatives to continue to improve training in and awareness of mental health issues. It is a very sensitive area and why we have put so much focus on customer service as well. Towards improving the whole training, we have created our customer relationship group. There is a 25-member group made up of a number of national charity representatives. They have participated in the review of our training materials and various other things, including communications. Part of improving the process and the journey for people with mental health issues is trying to make sure they return some of their paperwork. The ESA50—the self-assessment that one of the charities mentioned earlier—is a barrier for some people. It is quite daunting. It is a huge form and quite difficult so we created a helpline to help people to complete that ESA50. We have made it available as part of our improvements.We also created videos and put them on our website so that people can see what an assessment is going to be like. We try to encourage people to bring companions, because that in itself can help to relieve some of the associated anxiety.

Chair

One of the things we know, and we know it in our own constituencies as well, is that the third sector often supports people through advice, and through specialist support in the case of organisations such as Mind. Have you considered any partnerships with those sorts of organisations? It would make it better quality and speed it up if someone comes with the right bit of paper and the right evidence filled in properly, rather than coming and finding that your assessor does not have the information they need to do the work.

Leslie Wolfe

We have not partnered, per se, in terms of what we are each saying and how we are helping customers when they call in. Sometimes they are calling for different reasons. They may want to appeal or to complain. Some of the other charities are actually helping people to complain, so they have their own goals and other services that they provide, but because many are members of our customer relationship group, they have weighed in on some of the scripts, on how we interact and on training. In that way, we have invited criticism and feedback.

Chair

There may be something to explore here, but I will just ask Capita, and then I will go back to Nigel Mills to maybe pursue this. Do you use any third sector partners to help people get over that threshold of filling out the paperwork, which is very daunting for a lot of people?

Chris Stroud

We do not partner with anyone at the moment. What we do is work with groups across the country and across our area. Through the expert collaboration forum, for example, we take feedback from them and they help us with our assessments and our training, similar to Ms Wolfe, but we don’t partner directly.

John Pugh

Can I just butt in on the staffing? Two per cent. a month is still losing about a quarter of your staff over a year. This stuff has never been gotten right since the Elizabethan poor law. Is it fair to say that, for any medic, it is a bit of a shock working in a new environment? Previously, people were pleased to see them when they showed up as a nurse or a doctor, but this is the one context where, as a nurse or a doctor, people are not necessarily overjoyed to make their acquaintance. This question is as much for Sir Robert as anybody else, but do you not have to build it into the system that there will be higher than usual wastage and rotation of staff?

Sir Robert Devereux

I think you have touched on a very important point.

John Pugh

Oh good.

Sir Robert Devereux

The NAO very kindly added, although I did have to ask them, that in the next three years we are going to spend £92 billion of taxpayers’ money on these collective benefits. Part of that process, which the Government have decided policy-wise, and you can understand why, is to say, “Look, I want this £92 billion to go to the right people.” So, yes, I am going to put in place a process that involves people with healthcare professionals. You are right that it is a different sort of healthcare professional work from what they would find if they were in a GP’s surgery or hospital. None the less, we are in a happy position where, just to take MAXIMUS, we have 40% more healthcare professionals currently working in that sector doing tests than previously, so the contractors are doing something. You are absolutely right that this is a difficult area because, with your other hat on, you are asking to make sure that funds go to the right people, and when it comes to issues of sickness and disability, even getting the rates right—leaving aside whether they were previously getting nothing all, there are two rates for both of the PIP things, so I need to get the right one. If you are sitting in front of a healthcare professional, you would like the high rate. Healthcare professionals are trying to do difficult work. You have heard how we are seeking to train them to get that right as often as possible.

John Pugh

Making different sorts of judgments from what they would ordinarily have been familiar with.

Sir Robert Devereux

Not different sorts of judgments.

John Pugh

Not just medical judgments but how the medical judgments equate to the benefit.

Sir Robert Devereux

Maybe the thing to think about is for whom they are working. If I go to my GP’s surgery and I am ill, I want the doctor to make me better, and that is the nature of the relationship. In this particular case, the healthcare professional is seeking to do a functional assessment on behalf of the Government to see whether or not the conditions of the benefit, as laid down by Parliament, have been met, and that is a different sort of one-on-one relationship.

Chair

And that’s just one relationship.

Nigel Mills

We have been building up to this question a little bit. You are right that you have some £90 billion-worth of benefits here. Presumably you still regard these assessments as a very important part of the welfare system.

Sir Robert Devereux

I do.

Nigel Mills

I presume that what you want is a sustainable market of people wanting to carry out these assessments and to bid for them as and when tenders come out. What are you doing to try to ensure that there are enough healthcare professionals out there who are willing to work in this sector?

Sir Robert Devereux

Before we got anywhere near the personal independence payments introduction, let alone the subsequent work with MAXIMUS, we went and did a very detailed study with some external help on the nature of the healthcare market, what sort of hours people want to work and whether people would like to do some of this on the side of other things they are doing. The conclusion that came back was that there is plenty of potential for people to want to do this work. The thing I am feeling more positive about, based on the Chair’s remarks at the start, is that you can now see each of these contracts getting to a place where backlogs are coming down, the speed of processing is going up and people are getting on top of this. That, in itself, will be a positive reinforcement in terms of saying, “This is work you can do. It is important work. The Government does need it done.” My view at the minute is that I have contractors performing not entirely in all parts of the country as I would want, but none the less in the right direction. That probably means I am feeling relatively positive about my chance of finding more than one person to compete for the next one. I found two, as I told you, for MAXIMUS.

Nigel Mills

Lots of these contracts are coming up for renewal or extension.

Sir Robert Devereux

I only have three altogether.

Nigel Mills

You were talking about trying to regionalise the contracts. That would give you a few more to find, wouldn’t it?

Sir Robert Devereux

Yes.

Nigel Mills

So you are optimistic that you are going to have the right range of bidders to give you the choices, risk transfers and quality you are after?

Sir Robert Devereux

I am feeling better about that now than when I came in front of the Committee two years ago, when we were at the height of backlogs and we were still in a position with Atos that you have come to a conclusion on. On metrics, the questions you should be asking are, “Are we doing enough tests? Are they prompt enough and good-quality enough?” Actually, those things are drifting in the right direction, which will help the market response.

Nigel Mills

It is tempting to ask Mr Haley and Mr Stroud if they are going to fancy re-bidding for any of these contracts. Is there any comment you would like to make on that? Do you think these are good things for your organisations?

David Haley

Our focus is 100% on delivery of the PIP contract that we own. That is our complete focus. In terms of what will happen in the future, it is impossible to talk about it.

Nigel Mills

Do you think your reputation is recovering from the ESA situation?

David Haley

We are focusing on improving the quality, which is an ongoing need. As Mr Devereux says, the volumes are—we do not want to go back into backlogs. We want to make sure we are delivering successfully across our contracts, and that is our 100% focus.

Karin Smyth

Sir Robert, you talked about regionalisation, which I am interested in. You said it was going well everywhere. This Report does not cover, for example, Northern Ireland, although some of the assessments obviously do. Can you give us an idea of the differences across Scotland, Northern Ireland and England and maybe in between them, or is it going well everywhere?

Sir Robert Devereux

I do not think I said it was going well everywhere. What I said right at the start was that the overall numbers—you can see it in the figures in the Report—show that backlogs are coming down. In the PIP case, we do not have backlogs and are processing it promptly. In the ESA case, we are now reducing backlogs and processing faster. Because Leslie is taking on more staff, she is able to do even more. That is the aggregate position. In any one area, the contractors do or do not have problems. It has always been more difficult to recruit people and retain them in London, for example. One of the things that the NAO Report has credited us with is that we are much closer to what is going on. Nicole is spending her entire life making sure she knows exactly where there are recruitment issues and why, and being on the contractor’s case to make sure they fix it. Please do not take my comments about the aggregate performance as implying every part of the country.

Karin Smyth

Can you share some of those differences with us across those regions?

Chair

Are there are any areas you are worried about, particularly?

Sir Robert Devereux

Maybe Nicole can tell you about some of these, but we are looking at this in each of the different areas. We know how much work is going into each of the centres. We know what their backlog is. We know what their time for processing is, so we are working through each one to make sure we get a consistent performance.

John Pugh

Are you looking at necessarily the right metrics? Previous witnesses pointed to the fact that the number of appeals was going up and the number of successful appeals was going up. You presumably look at charts like figure 5a, which shows the number of assessments rejected is relatively small. Presumably, Mr Devereux, you look at a score card and you compare the assessments rejected against appeals founded and successfully pursued. Do you?

Sir Robert Devereux

There were several different things in there. The process that we are running at the moment, which has changed in the past several years, is to encourage people who think that they did not get the right decision the first time around to come straight back to the Department to tell us why. This is the process that we call mandatory reassessment.

John Pugh

Yes.

Sir Robert Devereux

The consequence of introducing mandatory reassessments is that the number of appeals to tribunals has fallen very, very sharply. Just to be clear what language we are using, people are coming back to us—the Department—as part of mandatory reassessment, but the numbers of people then seeking to actually appeal is very much smaller. In doing that process, we are responding to the consistent effort the Government have made on PIP and WCA, through the independent reviews by Professor Harrington, Dr Litchfield and Paul Gray, and saying, “What is the best way to do this?” One of the best ways is to ask people to come back and tell us if they think they have not had a proper hearing, and to ask them to tell us what other information is available. We consistently do that, and people are coming back and we are processing their mandatory reassessments.

John Pugh

To follow on from Karin’s point about regional variations, is it the case that when you get a large number of assessments of not fit for purpose in a particular region, you will also see a large number of appeals or people applying for mandatory reassessment or whatever in that same region?

Sir Robert Devereux

So—

John Pugh

I am inquiring about the management of the contract and how you manage suppliers on a regional basis.

Sir Robert Devereux

The different contracts are processed in different ways. There is a finite number of centres out of which Leslie is operating. We have the data for each of those centres and we look at them, one by one, to see what we know about how many people they have, how many are trained, and what the grade C reports and the appeal rates are. Maybe, Nicole, you want to say how we spend our time with the contractors to understand all that.

Nicole Kett

We do. It does not make sense to look at the overall national picture. In the discussions that we have with MAXIMUS on a weekly basis, we ask for the breakdowns of where the regions are and what is happening in each of them. Then we can see very clearly what the problems might be and we focus on the ones where there is obviously more work than there should be. In addition, I have people who are based in the regions, and work closely on the shop floor with the contractors and with our own operations people to help smooth things through where necessary. There are people on the ground who can see what is happening and then we have a regular discussion every week, asking, “What is happening in this region? Why is that? What are you doing to correct it? What are the problems here?” The contract, in the case of MAXIMUS, includes regional floor targets. That is an incentive for MAXIMUS to ensure that they address areas that we knew were difficult. London and the South East was one of those areas, and Central was another. I think there was a third, but it escapes me for the moment. But that is the discussion we have because we do not want to satisfy ourselves that nationally this all looks great, thanks. We don’t. We go and have a deep dive into the detail.

Nigel Mills

I think we have probably moved on to the quality questions. Perhaps we can start on the PIP assessment quality. Mr Haley and Mr Stroud, figure 5 in the NAO Report suggests that quite a high percentage of reports are not meeting the contractual thresholds. For Atos regions 1 and 3, the target was 4% falling to 3% and it seems to hover at about 13% and 14%. You are not meeting the thresholds for three times as many reports as you should do, Mr Haley. Is that right?

David Haley

I think the Report quite clearly shows that the progress we are seeing around the quality service level continues to improve. At the point of this Report, it reflects the closing position of 9% and 8% in each of the lots. That progress continues to improve as it has done into this year.

Nigel Mills

So where are you now?

David Haley

Sorry?

Nigel Mills

What’s your percentage now?

David Haley

It’s heading in the right direction. It is a couple of points lower than that, as we stand, across the lots.

Nigel Mills

So what is it?

David Haley

Based on our internal MI, we are sat at around 7%.

Nigel Mills

Just twice the target you are meant to achieve.

David Haley

I think it is important to understand that this is an important target because it ensures that we are very focused on the quality of the reports. As we know, the quality of the reports is critical to outcomes and so on. A colleague mentioned the return rate where a decision is impossible unless there is some rework. The C-grade quality, where a report is deemed to have had some issues, continues to be under focus. We will always ensure that we are staying within that as well. One of the interesting things in the Report is the need to grow the amount of health professionals that you need while staying focused on quality. It is complex to grow the huge number of new health professionals coming into this while also ensuring that the quality is not only under control, but stays as the central focus. That is a very complex area. When you are, as we currently are, growing the number of health professionals, you must always keep the quality discussion in balance. Ms Wolfe was talking about taking front-line experienced health professionals to help them with mentoring, training, auditing and the 100% audit required for when new health professionals are coming into that. There is a lot of focus on the quality at all times, because the assessment—

Nigel Mills

I kind of get this, but we are well over three years into the contract. I thought that you might have been a little apologetic that you were still missing the target by double, even now.

David Haley

I think any failure on the quality target is unacceptable, and we would not be happy with that. We are always going to be focused—

Chair

You are talking as though it is theoretical. Are you happy with that? You said that you “would not be happy”, but are you happy?

David Haley

No, of course I am not happy with the target, and that is why we will always stay very focused on ensuring that we hit and exceed the service level targets that are in place.

Nigel Mills

Mr Stroud, we have just had Atos apologise for still being double the target. The last month that the NAO assessed, you were a rather whopping 12 times the threshold that you were meant to get to. Is that something that you have sorted out in the meantime?

Chris Stroud

First, let me apologise and acknowledge that our quality has not been acceptable, and there is no shying away from that. On the two figures in the Report, 5 and 5a, one talks about whether the reports are fit for purpose for the Department to make a decision and, as your colleague remarked, we are performing at well over 99% on that. Against figure 5, it is evident that we need to improve. We have a quality improvement plan in place. We have had that since the NAO fieldwork was done this month. Our position this month is unaudited, but we reached 20%, so we have a downward glide path. It is still not good enough, but we are working very hard. May I just explain figure 5? It is a provider self-audit of quality, and what we look for there is how well a report is written and presented. When we look at that report, we look for such things as spelling mistakes, grammar and overuse of abbreviations or acronyms. We also look at whether the select choices that have been made have been right or poor, and we also look at the narrative within that. We self-audit very hard. It is a robust audit, and I am confident that we will improve. We are improving and, moreover, our marking will stand up to—

Chair

Mr Stroud, we know that there are a lot of issues around self-audit, but I will leave that to Nigel Mills. On spelling mistakes, it is right that you should watch for them, but it is a bit shocking that you have highly trained professionals who cannot write a report without littering it with so many spelling mistakes that you have to pick it up in audit. Do you not think that that is a bit of a failure from the beginning?

Chris Stroud

We mark robustly. It is an open and transparent audit. If there are mistakes in there, we mark accordingly.

Chair

It just smacks a bit of sloppiness.

Sir Amyas Morse

My questions range across the providers a little bit. Ms Wolfe, when you listen to these gentlemen describing, you clearly reckon you know how to raise the quality much more quickly than them by being more intense in your approach. Do you think they really are not managing it in the same way that you are? Is that right? I am trying to understand, because they have been in these contracts for quite a while, and they are still not making their quality targets. We are having short-term explanations about growth in numbers still being put forward. What is the difference between them and your company in what you expect to achieve on quality? How come it is so different?

Leslie Wolfe

I think we still have some quality issues ourselves. We are still not where we need to be, either, so I am not happy with that. I will not be satisfied until we meet our quality score as well. There was a change in methodology when we took over on 1 March, but that is not an excuse. We agreed to a 5% target and we need to get there. Again, the NAO Report is reporting our performance for the first five months. The good news is that we have continued to trend towards that target. As of December we are at 7.4 for our C grades, and I am determined to get us under 5. We have done a number of things to get us there, including changing the training, as I mentioned. There is much more mentoring and coaching. We have changed the structure a little so that there is a bit more one-on-one time. There used to be a real focus on 100% audits—too much 100% audit—and an over-reliance on that, which meant that people were not getting quick feedback, and it is the quick feedback that changes behaviour and makes people more aware of where their errors are. So, some of those initiatives that have taken place are bearing fruit now and we are seeing the right trend line. That is the good news, but unfortunately we are still not there, either.

Chair

You seem to be doing it quicker than the other two, as Amyas has highlighted.

Sir Amyas Morse

I am not trying to put you in an awkward position, but we need to learn from this. I think you described some things that sound pretty good. I am just trying to understand whether, as you listen to what Miss Wolfe is saying, you are thinking, “We are doing all that as well and still not making our quality target”, or are you thinking, “That sounds like a good idea; we should be doing it”?

Chris Stroud

We are doing very similar things to Miss Wolfe. Our quality is improving; it is not what it was. Initiatives we have put in place—training, audit, and increasing the number of senior clinical coaches in the field—are bearing fruit.

Sir Amyas Morse

The same for you?

David Haley

I completely agree. This is a learning practice as we move forward. We are always looking to improve the structure of how we manage and improve the quality, particularly with senior clinical leads and the auditing, training, developing and mentoring. This is complex and it is a lot to be able to manage. Time, of course, is important, but making sure that we are heading in the right direction and learning, and continuing to bring that learning back into continued improved practice, is clearly something we need to always be on top of.

Sir Amyas Morse

It is very easy to say this. I am sorry to persist with this, but I will try one more time. You guys are not making your quality targets. You have been at this longer than Miss Wolfe. Is it actually achievable to get to these quality targets? I know you are trying hard and you are improving, but it is not incredibly rapid improvement. Let us be honest. Is it achievable to get to these targets, or is that something about which you will just keep on saying in future, “We are really keen to do it”?

Chris Stroud

We want to achieve that target of 3%. We are working very hard to do it. We have agreed an improvement plan with the Department, which brings us to that target during this year.

Sir Amyas Morse

But you believe it is achievable. That is not the same as wanting to achieve it.

Chris Stroud

I believe the target is achievable.

Sir Amyas Morse

Same for you?

David Haley

We believe we will meet the expected target.

Leslie Wolfe

Yes, sir.

Nigel Mills

Mr Stroud, I think you just told us your performance is still at 20% failing this internal audit that you do. I guess I can cope with a few apostrophes being missing and a few spelling mistakes, but you have suggested that some of these assessments fail because the commentary is not adequate for certain parts of the assessment. Do you have a breakdown of what proportion fail for spelling mistakes and what proportion fail for substantive issues?

Chris Stroud

I do not have that information with me at this moment in time.

Nigel Mills

Do you have a feeling for it? Is it mainly spelling mistakes or more qualitative ones?

Chris Stroud

I do not have the data. I think it is across the board. Some of the improvements we have done in the improvement plan are around support tools for the assessors. We have built an algorithm, so if an assessor picks a criterion that says that the claimant can wash unaided, and then picks another criterion later that says the claimant needs help to dress below the body, the tools we have now built will automatically flag that to the assessor and stop that happening. So we have taken the learning from the mistakes that have occurred in the past and we are building that into the support tools that we have going forward, and that is showing benefits in what we are doing.

Chair

It is the DWP that sets the contract, so we should hear from you, Sir Robert.

Sir Robert Devereux

We do know something about what is going on in grade C reports, and it is not primarily spelling mistakes—I’m not going to go to this trouble just to get the spelling right. Two different things are going on. First, perhaps I should say that assessing somebody’s disability is actually quite complicated. It is not straightforward and black and white. The claimant will have filled in the form and said what they think. They will probably have supplied some data from the NHS, their GP, perhaps a surgeon or a psychiatrist or whoever it might be, and there may have been a face-to-face assessment with a healthcare professional. The thing that we are most interested in is whether all that information has been thought about and, in so far as it might appear to be superficially inconsistent, whether we can make sure that we have reached the right judgment. We are paying to make sure that we have all the information and have thought about it, and that we then put the weight on the right thing. A grade C report is when, prima facie when you come to do the audit, you can see that those things don’t all necessarily stack up. We are saying to the contractors, “Look, I have given you a set of functional tests that I am trying to do. I do appreciate that people’s conditions are many and complex and varied. Please can you think about all this evidence and tell us which way you think the scores go?” That is the process that is going on. As you can tell from the data, at the minute, two of the suppliers have gone from somewhere in the 10% to 12% down to 7% on the way down to 3% and 5%. It is the case that we have more issues at the moment with Capita, with a high number, but that is the nature of the issue. It is to do with the mutual consistency of all the data, on which we can then make a safe decision.

Nigel Mills

Okay, I get that. I guess we would all be quite concerned if reports are internally inconsistent on what look like indicators where you would expect that if you cannot do one thing, you probably cannot do the other.

Sir Robert Devereux

Let me make one other observation. These are assessing the quality of the reports as they come to the Department. We haven’t touched on the fact that in practice the final decision is made by my staff, who are paid to be decision makers. They spend their life weighing evidence, so although they are not healthcare professionals themselves, they can spot that if fact A seems inconsistent with fact B, they had better ring up the assessor and do something about it. What actually goes on in practice is that there is a lot of contact backwards and forwards, because the decision makers are saying, “I don’t get this.”

Nigel Mills

Okay, so there is a lot of contact. I am intrigued by figure 5a in the Report, which suggests that the target threshold on ESA and PIP was 1% for assessments returned to the provider as not fit for purpose.

Sir Robert Devereux

That is a different thing. The story I have told you is that the thing we are seeking to measure in figure 5 is, “Is this report well thought through? Have you looked at the data and paid attention to it?” I have also explained how, if the decision makers perceive that a report doesn’t meet the standard, they will go back and ask. In some cases—a very low number of cases—the report is of such poor quality that no amount of ringing up is going to make it better and it needs to be sent back to be reworked. That is the very small percentage that you are seeing in figure 5a, but it is not the same. I don’t want you to be misled into thinking that we are sending back only 1% and the other 8% or 9% are just going through as is, because there is a lot of to-ing and fro-ing between the decision makers who, at the end of the day, make the decisions. They don’t just take the reports.

Nigel Mills

But that to-ing and fro-ing is not measured in any kind of assessment, is it? You have to understand that we are a little concerned that one figure tells us that Capita thought that 36% of their reports did not meet contractual standards—we understand that some of that is not spelling and grammar, it is fundamental inconsistencies and errors in the report—yet for that same month you were sending back around one in every 130 of those reports as not being satisfactory. It looks like there is quite a gap there, doesn’t it?

Sir Robert Devereux

Yes, but what I am trying to describe is that sending things all the way back to be completely reworked from scratch injects time into the process. Remember, these are just sampled cases, so most of them are not in the audit process, they are just coming through. My staff are reading a report and they say, “It looks as if they said something about walking over here that doesn’t seem to match what the surgeon said over there. Will you please tell me whether you asked this question and resolved it?” If the healthcare professional says, “Actually, I did ask that question and I just didn’t write it down,” we’re fine. If they say, “No, I didn’t notice. I will think about whether I want to change it,” then that’s fine. I am drawing a distinction between the actual processing and the amount of thought my staff are putting into it and the 5a metrics, which are actually about where my staff say, “I am not sure what I can do with this. I am just going to send it back and have it reworked.” I can see why they appear to be the same, but they are quite different things.

Nigel Mills

If I were a claimant who had just been turned down for PIP, I would be a little annoyed that your person had to review the medical assessment and check: “By the way, did you find out whether this person can walk the required distance or not? It doesn’t appear to be in the assessment.” That strikes me as being so fundamental—

Sir Robert Devereux

No, you’ve started putting words in my mouth. If, for example, the claimant says, “I can’t walk more than 20 metres,” and then elsewhere in the description of their day they say, “Every day I walk to my sister’s,” it would be perfectly respectable to ask, “Actually, how far away is your sister’s?” to corroborate that. If it is not obvious that the healthcare professional has asked that question, there is a question that said, “They said these two things. Did you actually test it?”

Chair

It does affect the fundamental quality of the assessments, because this is something that is common sense.

Sir Robert Devereux

I quite agree. As far as we are concerned, the performance on figure 5, the actual quality, is an important thing. I want it to be the percentage which they all committed to do, and I do not want anyone to be distracted by 5a to think that somehow, I am broadly happy. I am not.

Chair

Good. You say you are not broadly happy; we will leave it there. Acknowledging that there is still work to be done is very important in this respect.

Q113Nigel Mills

I am still trying to get my head around that. So when Capita or Atos do an audit of a sample, they find in Capita’s case that one in five is not meeting the standard, commonly for quite fundamental reasons. When your decision maker reads every report, including the 80% or whatever percentage has not been audited, you only feel the need to send back one in every 130? I am thinking that probably 20% of all the ones that have not been audited will be well below standard.

Sir Robert Devereux

Yes. That is what I am trying to tell you is not happening. There is a difference between physically sending it back and saying, “Please do this all over again,” and picking up the phone and saying, “Look, there’s only one inconsistency, and it’s this. Did you ask?” If the doctor says, “Actually, yes, I did ask, and this is the answer,” tick, fine. We are trying to make sure it is a consistent story. In many cases, the assessment files will do it. It is a failure of the writing of the report. That is important, because I would rather not have to make the wretched phone call in the first place.

Chair

Can you be sure someone would remember? This is an obvious question. If a report goes back because there is a query, would the assessor remember if they have done six to eight assessments in a day?

Sir Robert Devereux

But these are coming back quite quickly. Let me make another observation, because then you may understand why I feel this is a reasonable thing. Given the variation in quality, you might have thought, if the risk was the one that you identified, that the rate at which people succeed in securing PIP at each rate of benefit would be different depending on quality. It is not, actually, so it does look for all the world as if the system operates between writing the report and my staff having to go back when they do not think it is right—too often, which is worth acknowledging—but the system is none the less getting to a sound decision. So that is the thesis I am putting in front of you. I have explained a mechanism; I have also now adduced an actual fact, which is that the success rates are broadly comparable despite quality. I want you to be clear that I do not think it is acceptable not to meet these standards; it would make life a lot faster and better if they were met. They have all agreed to do it, and I look forward to seeing it shortly.

Chair

We all do.

Nigel Mills

I suppose the question that we have in terms of contract management is this. There is a measure in figure 5a about the absolute ones that are sent back. I can understand that some have issues that need clarifying and correcting but are not a complete rejection, but in terms of how you provide service credits to the providers, I am assuming you need a measure to say, “This report is not acceptable; it requires us to go back and clarify things,” and that that triggers some other target that is being missed. It appears that your targets are too far apart for this.

Sir Robert Devereux

There are service credits for failing on figure 5. If people are getting 20% grade C reports, they are going to be hit with service credits. If people get 7%, they are going to be hit with service credits.

Nigel Mills

So you are happy that the targets and measures you have in these contracts are in the right place, and that they are capturing the whole range, from spelling errors down to fundamentally unacceptable, and there is nothing else you would like in between?

Sir Robert Devereux

As I said earlier, spelling errors can be a bit of a distraction. I would rather they were not in there, but that is not what we are doing this for. The question which the Department is trying to think through at the moment is that we are trying to do an audit of this which basically says, “Does it all hang together?” It is not quite the same as “Has this report led to the right conclusion?” There is an interesting question whether you can tie together the two parts of the story that I have told so that you can go back and re-audit something and say, “I am now checking whether this is right. Did the right answer come out of it?” We said in the report that we are looking at how that might work, but for the moment I am comfortable that these are the right targets. We are looking to see whether there is a possibility to make it—

Nigel Mills

May I drift on to service credits and figure 9? I accept that the periods do not necessarily entirely overlap, but it just seems that Capita are performing a multiple of several times worse on those assessments than Atos and yet it appears that you accrued six times as many service credits for Atos as you did for Capita. I accept that the payments are more similar, but it just looks like a slightly strange situation.

Sir Robert Devereux

You are looking at monetary amounts and the contracts are of different sizes.

Nigel Mills

Yes, the Atos contract is twice the size of the Capita one. It is not six times, is it?

Chair

Who is not clear about who here? Repeat it, Nigel.

Nigel Mills

Just looking at the raw data between Capita and Atos, I accept that Atos has perhaps twice the area to cover, but it looks like they have had service credits accrue at six times the rate of Capita despite their performance looking slightly less bad.

Sir Robert Devereux

All the conversation that we have just had was about one area, which is one service credit. There are more like a dozen of them. The NAO has not reproduced performance against all the other things that we take into account.

Nicole Kett

Exactly. There will also be service credits around delayed cases, backlogs, etc. I think it is quite difficult to draw a conclusion like that. Atos has 75% of the volume of PIP, but the figures will not necessarily be like for like.

Sir Robert Devereux

To put it another way, the regime for service credits is the same in both.

Nicole Kett

Yes.

Sir Robert Devereux

And if you are further away from the target, as is the case with Capita, you will be paying service credits as a consequence.

Chair

We have about 15 minutes, Nigel, and there are others to come in.

Nigel Mills

I suppose it just looks a bit strange that Atos accrued service credits of £35 million, but only paid 17% of what they accrued, whereas Capita paid 70%.

Sir Robert Devereux

Can I take you to footnote 4? At my age, you have to put your glasses on to read it, but it states that £25 million of Atos’s payments was suspended, so if you were to do what it says in footnote 4, you would find that, leaving aside that £25 million suspension, they had £10 million of service credits accrued and they paid £6 million, which is broadly the same percentage as the rest. The £25 million that was suspended works like this: we were in the middle, as you know from when I was before you last, of a world in which we were finding there was a persistent sense that it took longer to do these assessments than we had expected. That required Atos to acquire more people and more property in which to put those people, all of which costs money. In practice, we said, “You go and get them. This is going to cost you £25 million, and we will not penalise you with a service credit, because this is a necessary adjustment of the contract as the facts have changed. It takes longer to do and you need more people.” I could just as easily have taken the service credit and then paid the £25 million and this table would have looked better. In practice, however, we said, “Let’s cut out the middle man and crack on and fix the problem,” which they have done.

Chair

Yes, and that has been audited.

Nigel Mills

I presume that Capita just somehow never accrued it in the first place and never had to be forgiven. Is that because you just suspended measuring the targets for them or something?

Sir Robert Devereux

No. I know, because it is in the figures here, that their performance warranted a service credit of £25 million, but part of the reason why their performance required that was the length of time these tests were taking on a brand-new benefit was longer than we had all anticipated. We were recognising—it is a sensible arrangement—that they needed more people and more property and that would cost money, so we made an adjustment to the contract to reflect the reality that we found.

Nigel Mills

This table, on the face of it, suggests that Capita did not have to make the same adjustment and did not have the same issue.

Sir Robert Devereux

Oh, sorry, Capita.

Nigel Mills

It seems that Atos accrued £25 million-worth of service credits that you thought it fair enough not to charge, but Capita never seemed to accrue the same level of service credits, suggesting that they did not have the same issue.

Sir Robert Devereux

So they all set out with a different delivery model. We touched earlier on the extent to which they do home visits. You do not need more buildings if you do mainly home visits. The remedy for an organisation with a different delivery model will be different.

Nigel Mills

I am a bit confused now. So Atos accrued six times the service credit for three times the volume even though Capita have a different delivery model, but somehow you did not charge them the service credit in the first place for missing all the volume and quality targets.

Sir Robert Devereux

Since this is a relatively complicated story and I know you are running out of time, how about if I offered you a nice constructive note?

Chair

That would be very helpful. Brief, clear, crisp and in plain English of words of one syllable—maybe that is a bit of a challenge—

Sir Robert Devereux

That’s not fair!

Chair

It is the DWP, so perhaps that is not the case. Sorry, I see too many letters—a simple letter would be very helpful. I want to touch on a couple of other points that have arisen. From the Department’s point of view, we have heard some real concerns that the contracts, even several years in in some cases, are still not going very well. What have you learnt, Nicole Kett and Sir Robert Devereux, about setting up the contract and managing it? You have changed the contract and the contractor, so what would you do differently if you had to do this again? Sir Robert touched on the complication, but some of this is not rocket science. Someone with a mental health problem cannot be assessed by a generalist; they need someone who knows about their particular problem. What are the two or three things that you would say you will take away from this?

Sir Robert Devereux

The couple of things I would take away, which to be fair are what I think we have done, are first to recognise that you do need to have enough people to do this who are properly trained, so there is no point having some sort of underpriced contract that is not properly remunerating it. Part of the reason we are paying more now is because the price the contractors need to pay to get people to do this work is at a higher level than it used to be. So one thing is make sure you—

Chair

Than it used to be, or than it should have been in the first place?

Sir Robert Devereux

A bit of both, actually, because I do think people’s perceptions of all this work has changed, but in any case the answer is: make sure you have got the right people. The second thing I have learnt for sure is that you do need to be very close to what is going on to manage it. You cannot just sit back and say “Fine, we got that, and the Report has been complimentary about that.”

Chair

That is Nicole Kett’s role that you are watching every contract.

Nicole Kett

Yes.

Chair

But isn’t that fairly recent?

Sir Robert Devereux

It is basically the currency of the Report you have got here, so you should thank her for the hard work, really.

Chair

But it was not the same when we had you in on this issue two or three years ago.

Sir Robert Devereux

No, it was not. We have made a conscious choice based on our experience both with the original Atos contract and with the first six to eight months of the PIP contract to do contract management differently. As you have been asking the Government to do, we have done and here is proof positive.

Chair

Absolutely—we wanted that.

Sir Robert Devereux

The right people is one thing. The contract management is the second thing. And in that, basically paying attention to the service credit regime does mean that people are properly incentivised to do the right work. I think we have got that straight in the contract that we most recently let, because we are further forward. So the one with Leslie, I think we know how that works and she has had to make a stock market announcement about the extent to which her profits are not where she thought they would be. That seems to me to be three lessons I would pick out.

Chair

I think we would all say that private profits come secondary to the quality of service to the individual. That brings me on to an issue around quality and the types of people you have doing this. You heard from our first panel and we have had a lot of evidence from other people about applicants being very concerned about appeals and their perception of the service—perception is reality for those going through it. Do you think that your definition of quality matches those of the disability groups that we heard from earlier?

Leslie Wolfe

I do think that quality should be measured in various ways and not just the quality of the reports, which are still incredibly important. These reports support a decision that impacts people’s lives, so the reports are critically important. But there are other measures of quality that are equally important and that is why we focus so much on the customer aspect as well. We pay close attention to our customer satisfaction surveys and we have expanded our survey to get more information, more feedback and quicker feedback and we will take that on board and continue to improve. The other that is really important is wait times. What came out in the evidence prior to us was the long wait times people are facing and the increased anxiety that is causing them as they wait for a decision. We are quite proud that we have broken the backlog—

Chair

Okay. But you recognise that it is still a problem—

Leslie Wolfe

It was a problem. We inherited 550,000 when we took over on 1 March. The audit Report notes it was down to 280,000 at the time of the—

Chair

That is in the Report. That’s fine. We’ve got that.

Leslie Wolfe

As of 1 December, we were down to 110,000. Hopefully, that is reflected in the testimonies.

Chair

To be clear to anyone who has read the Report, the field work was done in October, so that figure is news. We tend to work on what is in the Report.

David Haley

Quality always remains a focus. Although there is a metric that is reported in this Report, more importantly we work with disability representative groups on things such as the condition insight reports. We are always trying to work with organisations such as Mind and others to understand exactly how such conditions can affect individuals and how they present themselves. It is critically important to understand that it is a complex area and a complex policy, and everyone is unique. The stress of going through an assessment is very high, so it is important that the quality remains—

Chair

“Everyone is unique” is a very simple statement, but it is the nub of the problem. Atos’ original approach didn’t treat people in that way; there was too much automation.

Chris Stroud

Quality is absolutely critical, and we are focused on that. Moreover, from working with and getting feedback from the different interest groups, we are changing what we are doing. The primary focus for us is to deliver a respectful, empathetic and dignified assessment.

Chair

You’ve said all that. We’ll hold you to it. My colleague Madeleine Moon, the MP for Bridgend, who is heavily involved with the Motor Neurone Disease Association and Parkinson’s UK, attended a meeting with you, Mr Haley. She has written to you since, but as you are here I will ask you this question. Her letter says, “It would be helpful to have clarification as to the qualification of the health professionals employed by Atos.” I will ask the other two as well, as you are here. “In the meeting, David”—that is David Haley—“said that Atos ‘do not employ doctors’, which surprised us. If that is the case, who are the health professionals that Atos employ, and what experience is necessary to become an Atos health professional?” We’ve heard a lot about your training. Leslie Wolfe, you talked about that at great length. This is to Mr Haley first, and then we will take Capita and MAXIMUS. Do you employ any doctors? And what about all these specialist health conditions? Can you really train people up to deal with them in a generic way?

David Haley

We do not employ doctors to work on the PIP contract; we employ nurses, nurse practitioners, occupational therapists and a range of health professionals, all of whom have a minimum of two years’ qualification in their field. I talked about the condition insight reports. The job of the assessor is to understand how the individual presents and their functional capability. An understanding of the impact of that is important. We have supplementary support, such as—

Chair

May I interrupt you there for a minute? If someone has a serious mental health problem, and a nurse practitioner, however good they are, recognises that it is a bit more complex, are you saying that there is no doctor or specialist that they can be referred to within Atos?

David Haley

We have mental health functional champions—

Chair

What is a mental health functional champion?

David Haley

It is somebody who is available to a nurse practitioner who is about to do an assessment with somebody who has a severe mental illness.

Chair

What is the qualification of a mental health functional champion?

David Haley

I don’t have that information. I am happy to send you full details of all the qualifications.

Chair

It is an extraordinary title. I don’t think I’ve ever heard the words “mental health functional champion” before. It just seems a funny phrase. Can you tell us who they are? None of them are doctors?

David Haley

No.

Chair

Okay. What about Capita?

Chris Stroud

Again, we don’t have doctors carrying out PIP. We have two chief medical officers who are dedicated to the contract. 75% of our healthcare professionals are—

Chair

Are the chief medical officers doctors?

Chris Stroud

They are doctors, yes. 75% of our healthcare professionals are nurses. Within that nursing population, we have mental health nurses who work specifically in that area. They also act as support for other healthcare professionals who are not mental health professionals.

Chair

Can they refer upwards if they think there is something they can’t deal with?

Chris Stroud

Yes. As part of our quality improvement process, we have a dedicated line so they can ring into the hub and get help during the assessment.

Chair

Leslie Wolfe, and then I am going to bring in the Comptroller and Auditor General.

Leslie Wolfe

We have 186 doctors today within our total workforce, which is 1,251. We also have similar mental health functional champions. Those people have either worked in psych wards, have had mental health specialisation as part of their training, or we have supplemented their training to give them a specialist role. They are exactly as my colleague mentioned.

Chair

You say you have got doctors—

Leslie Wolfe

Yes, we have 186 today and we are continuously trying to recruit more—

Chair

So if I came to see you for an assessment for my employment support allowance with a complex mental health problem, and the nurse practitioner couldn’t properly assess me, you could get me referred to—or you could get support for that individual from—a qualified doctor in the area?

Leslie Wolfe

The likely outcome would be that if the case could not be completed because it was overly complex, they might be able—just as my colleague described—to phone a mental health functional champion and bring them into the conference. That person can help to ask the right questions and make sure that we’re probing in the right areas, or they can contact a doctor or someone with more specialisation in that area.

Chair

There is a real concern about these complex fluctuating conditions, as you will pick up.

Sir Amyas Morse

We agree on that. I was just thinking about a description of the interaction of the Department. These are multi-factoral assessments and you want to make sure that all the factors have been brought together, but the likelihood is that in the case of Capita and Atos at least they are being brought together by somebody with a nurse background. Are you satisfied that by training people with those backgrounds, they can assess complex, multi-factoral medical conditions across a—?

Sir Robert Devereux

Let me—

Sir Amyas Morse

I am sorry, but it’s a fair question.

Sir Robert Devereux

It’s a perfectly fair question, but I don’t want you to think that in setting up these two functional tests, which is what the WCA and the PIP test are, the Department and its doctors—and I mean doctors, if we’re going to argue the toss about it—have gone through what is necessary to make sure you can safely make those functional tests by way of healthcare professionals. The general sense of the Committee, which is, “Unless you’re a doctor, it really isn’t going to happen”, is not the view of the medical professionals who are in charge of this test definition—

Sir Amyas Morse

When I asked the question, I didn’t say that. I was simply asking a clarifying question, and I am perfectly entitled to ask it, thank you. I am sure people have thought about these things, but none the less what you are telling us is that as you assess people’s complex medical conditions, it will be down to somebody who has medical training up to a point, and then has specific training by yourselves? That is how it is resourced, isn’t it?

Chris Stroud

Yes. Our assessors are healthcare professionals. They are trained; they are experienced. And they will complete the functional assessment as described by Mr Devereux.

Chair

Okay. Karin Smyth wanted to come in.

Karin Smyth

I just want to raise this regional issue, which we talked about a couple of times but we haven’t really picked up anything concrete. I really want to be assured, and I do not think we get this from the Report. My Bristol, South constituents would have a different experience were they in Wales, Northern Ireland, Scotland, or possibly even in another region. I think you said that you look at the different parts of the UK, as well as perhaps different regions, to understand that. What we can’t get from these figures—the NAO may help me out here—is any sense of what’s going well where, or lessons learnt. Northern Ireland is very small—I realise it is not part of the NAO’s Report—but it has very small numbers compared with the rest of England, or indeed the south-west. You probably cannot cover it in the few minutes here, but I wonder if there is a way that we can perhaps get a better sense of that.

Sir Robert Devereux

Let us see what I can do within the framework of the published statistics. As a general rule, whether it is this particular piece of the benefit system or the entire gamut of it, we spend an awful lot of time making sure we understand how office X’s performance differs from office Y doing exactly the same work, and learning from that how to make them both better.

Chair

Absolutely. We just want transparency.

Sir Robert Devereux

It is one of the reasons why the Department’s performance has risen so strongly—because of doing that—and we apply the same technique, which is what Nicole is doing, to make sure that, centre by centre, we know precisely—

Chair

So, Sir Robert, in response to Karin Smyth’s question, will you be able to provide—you are saying there is all this published data, which is fine—some breakdown of the performance, so we can tell, and colleagues can tell their constituents—

Sir Robert Devereux

I am happy to go away and see what I can provide, subject only to the question that it has to pass the statistician’s test of whether it is fit for purpose—

Chair

Well, the statistician’s test, the confidentiality and all the rest of it—

Sir Robert Devereux

No, not of confidentiality; it is whether it is good enough statistics.

Karin Smyth

If we can have broad country and broad regions, that’s fine.

Sir Robert Devereux

Let me see what I can find.

Chair

I am sure the NAO will happily work with you on—

Max Tse

There are some published statistics on PIP by region—waiting times and so on—