Atos Healthcare paid a substantial amount of money to be released early from the controversial disability testing contract with the Department for Work and Pensions (DWP) 18 months before it was due to end.
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Last month Atos confirmed it was looking to cut short its £500m government contract for assessing whether benefits claimants are fit to work, but said it would carry on undertaking the tests until a new company was in a position to take over.
The DWP has announced that it is now looking for a new supplier. Mike Penning, Minister of State for Disabled People added that Atos will not be paid off. "I am pleased to confirm that Atos will not receive a single penny of compensation from the taxpayer for the early termination of their contract, quite the contrary, Atos has made a substantial financial settlement to the Department."
Penning said: "The previous Government appointed Atos as the sole provider for carrying out Work Capability Assessments and since then we have carried out several independent reviews and made significant improvements to the assessment.
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"Today we are announcing that we are seeking a new provider to replace Atos, with the view to increasing the number of assessments and reducing waiting times.”
Atos Healthcare tests disability benefits claimants to determine whether people are eligible. The company has been heavily criticised for the way it carries out tests by campaign groups and a government report in 2011 found that tens of thousands of sick and disabled people had been wrongly declared fit for work. Appeals against these decisions cost the taxpayer around £50m a year.
The supplier uses logic integrated medical assessment (LiMA) software to support medical professionals when assessing claimants. Campaigners have claimed for years that many people have had their benefits cut inappropriately because of the system Atos uses when assessing them. It has done nothing for the public perception of the company. Reports claim that there were 163 incidents of abuse or assault on staff each month last year.
In 2011, two Atos Healthcare employees were investigated over allegations that they made inappropriate remarks on Facebook about the people they assess for sickness and disability benefits, referring to them as "parasites" and "down and outs".