Atos will continue to supply IT to the Department for Work and Pension’s disability testing despite paying compensation to step down as the main supplier to the overall programme.
In March, Atos Healthcare paid compensation to be released early from the disability testing contract with the Department for Work and Pensions (DWP), where it assessed whether people were fit for work, 18 months before it was due to end.
According to Mike Penning, minister of state for disabled people, this was a “substantial amount".
But an interim arrangement, worth £10m a year, has been agreed that will see Atos IT Services provide a managed IT service to the DWP and the supplier that will replace Atos Healthcare as the main assessment service provider in 2015.
The contract could be expended a further four years.
According to a notice on Official Journal of the European Union website, the DWP had little choice. It said that moving to a new supplier for IT could risk it failing to meet its duty requirements.
“The technical requirements of the IT services, including hardware, software and premises, mean that another supplier would not be able to build, test and deliver new IT services in time for the new IT assessment services contract without there being an unacceptable level of service transition and delivery risk failure,” it said.
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It also said the current IT is owned by Atos and it would not be feasible to transfer these to a new supplier.
“Any attempt to physically relocate the assets would introduce a very high degree of service transition and delivery risk failure and also because all the services in the data centre are shared and used by the current supplier to service other contracts,” the department said.
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 2011 government report 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. Reports claim 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.
Atos defended its role on the programme. "Atos Healthcare do not make benefit entitlement decisions, all of which are made by the DWP directly. Appeals are against a DWP decision not an Atos Healthcare report. The NAO warned that there were dangers in the assumption that a successful appeal was a measure of the quality of the assessment by Atos Healthcare and feedback from the Tribunal Service backs this up showing that less than 1% of successful appeals were due to an inaccuracy in an Atos Healthcare report," said an Atos spokeswoman.
"Our healthcare professionals do all that they can to treat people with respect during what we know can be a stressful experience. We have delivered assessments on behalf of the DWP since it was first outsourced in 1998 and our doctors, nurses and physiotherapists are highly trained and qualified individuals."