Atos Quits Fitness-To-Work Tests Contract
Atos, the firm that carried out assessments for disability claimants, is quitting its government contract early.
The Department for Works and Pensions said last summer it had identified "significant quality failures" in reports produced by the company as well as waiting times.
The contract was due to end in August 2015 and ministers have stressed no taxpayer compensation will be provided for early termination.
Currently, claimants undergo a Work Capability Assessment when applying for Employment and Support Allowance, to assess their ability to work.
A procurement process is now under way to provide a new provider.
In the longer term it is intended to move to multiple providers to increase competition.
Mike Penning, Minister for Disabled People, told Sky News: "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.
"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."
Richard Hawkes, chief executive of the disability charity Scope, said: "I doubt there's a single disabled person who'll be sorry to hear that Atos will no longer be running the fit-for-work tests.
"We welcome the minister's decision. He now has a real opportunity for Government to review their approach to Work Capability Assessments and ensure that when they appoint a new provider there is a move away from a fundamentally flawed system.
"The question we have to ask is how many disabled people have jobs? Nine in 10 disabled people work or have worked, yet only about 50% of disabled people have a job right now."
Atos will continue to deliver the Personal Independence Payment (PIP) assessments in different regions of the UK and the Work Capability Assessments in Northern Ireland.
Atos said in a statement: "Atos Healthcare has reached an agreement with the Department for Work and Pensions to allow it to exit from the Work Capability Assessment contract early, with a view to a new provider taking responsibility for delivery by 2015.
"Atos Healthcare will continue to deliver Work Capability Assessments until a complete transition has taken place to a new supplier.
"We will be transferring our infrastructure and employees to ensure consistency of service to those going through the process.
"There will be no change for those applying for Employment and Support Allowance."