With a 38% overturn rate on decisions made, where claimants have wrongly been assessed as fit for work, the Public Accounts committee say the DWP have wasted too much of the taxpayer's and claimant's money.
Margaret Hodge, the chair of the committee, said the Department for Work and Pensions was getting far too many decisions wrong on claimants' ability to work.
The report says that a large amount of the blame for the problems that these tests have caused people lies on the government, despite the amount of criticism that has been placed on ATOS, the company hired to carry out the work capability tests.
The tests on claimants were introduced in 2008 to assess entitlement to employment and support allowance, but these have been increased since the Coalition came in to office, with their insistence on getting people off benefits and back to work. Atos have been paid £112.4m to carry out 738,000 assessments in 2011-12.
The committee said the DWP's evidence during its hearings was not always consistent with views of other witnesses, with different interpretations of statistics showing an unfair bias and resulting in the numerous appeals.
The report said:
The Work Capability Assessment process is designed to support a fair and objective decision by the department about whether a claimant is fit for work, but in far too many cases the department is getting these decisions wrong at considerable cost to both the taxpayer and the claimant.
The department's decisions were overturned in 38% of appeals, casting doubt on the accuracy of its decision-making.
Poor decision-making causes claimants considerable distress, and the position appears to be getting worse, with Citizens Advice reporting an 83% increase in the number of people asking for support on appeals in the last year alone.
We found the department to be unduly complacent about the number of decisions upheld by the tribunal and believe that the department should ensure that its processes are delivering accurate decision-making and minimising distress to claimants.
Margaret Hodge, who chairs the committee, said:
This poor decision-making is damaging public confidence and generating a lot of criticism of the department's contractor for medical assessments, Atos Healthcare – but most of the problems lie firmly within the DWP.
The department is too often just accepting what Atos tells it. It seems reluctant to challenge the contractor.
It has failed to withhold payment for poor performance and rarely checked that it is being correctly charged. The department also cannot explain how the profits being made by Atos reflect the limited risk that it bears.
There needs to be a substantial shake-up in how the department manages this contract and in its processes for improving the quality of decision-making.
The report says it is unable to conclude whether there have been any improvements at all, but Mark Hoban, the employment minister, said the report is incomplete:
This report completely fails to recognise the considerable improvements we have made to the Work Capability Assessment since coming to power in 2010, having inherited a system from the last government that was not fit for purpose.
Judging from reports that have come in from terrible cases that have been reported nationally, the situation has increasingly worsened, in particular since ATOS have taken on the contract, so another attempt to pass the situation off on the previous government seems unfounded, and still doesn't account for all of the problems highlighted in the report, in particular the undefendably high rate of appeals, proving an inaccurate decision.