The public spending watchdog is to investigate concerns over the award of a £184 million disability assessment contract to Atos Healthcare.

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{EMBOT SUBSCRIPTION=5,6} The investigation by the National Audit Office (NAO) will be part of a major “value for money study” into the government’s new personal independence payment (PIP), which is replacing working-age disability living allowance.

The decision to examine the award of the contract to Atos follows an investigation by Disability News Service (DNS), and concerns raised with NAO by the crossbench peer Lord Alton.

The results of the study are likely to be published in early spring.

Max Tse, NAO’s value for money director, said in a letter to Lord Alton this week that he had reviewed documents submitted by Atos to the Department for Work and Pensions (DWP) when it tendered for the contract last summer.

He said he agreed with Lord Alton that the list of sub-contractors listed in the tender was “somewhat different” from the list of those Atos is now working with.

He also said that the implementation of PIP was “an area of active interest” for NAO, and that the review “should allow us to explore these issues further”.

In a statement, NAO said: “The study will examine whether PIP is value for money from a claimant, operational and programme management perspective.

“This will include looking at whether PIP has strong contractual and management information foundations, how the programme was implemented and whether the wider-impact of PIP across government is understood and monitored.”

Atos won the contract to carry out PIP assessments across London and the south of England last year, as well as another contract covering Scotland and the north of England.

NAO has been in discussions with DWP over its PIP “contractual arrangements” for at least three months.

Lord Alton said the letter was “extremely welcome news”, and added: “The intervention of the National Audit Office, their finding of a prima facie case against Atos Healthcare, and their decision to conduct a vigorous and through inquiry into the tenders and performance of a company receiving millions of pounds of public money will give encouragement to the many disabled people who have questioned the basis on which Atos is overseeing and administering these fundamental changes to the benefits system.

“The NAO have the capacity and experience to properly hold them to account. We will now await the outcome of their in-depth inquiry – which puts both Atos and the Department for Work and Pensions on notice.”

Richard Butchins, the disabled documentary-maker, whose recent work includes films on the government’s “fitness for work” assessment and the PIP reforms for Channel 4′s Dispatches, said: “It is no surprise to see that the DWP and Atos may finally be held to account for what appears to be a dubious procurement process.

“The presentation of savage benefit cuts for disabled people as being ‘good for them’ has to stop and the fact that the ‘hand in glove’ nature of the Atos/DWP relationship may be revealed can only help. Expect some top quality wriggling from the DWP on this one.”

A DWP spokeswoman said: “We have acknowledged the letter and we are working with the NAO on this review.”

Atos has so far declined to comment. It won the contract by boasting of its “extensive” network of 16 NHS trusts, two private hospital chains, and four physiotherapy providers, all of which it said would provide sites where the tests would take place.

But in the months after the contract was awarded, all but four of the NHS trusts and both of the private hospital chains dropped out.

Following a Freedom of Information Act request from DNS, DWP admitted that Atos had far fewer sites in its supply chain than it originally stated in its tender documents.

When it submitted the tender, Atos stated that it had a network of 740 assessment sites across London and the south of England.

But Atos has since revealed that it only secured 96 assessment centres, including not a single one covering a vast sweep of north London, and only one in Suffolk, one in Cambridgeshire, and just three in Norfolk.

Because there are so many fewer centres, thousands of disabled people will face far longer and more complicated journeys to reach their assessments, often by inaccessible public transport.

Atos has previously insisted that no pledges made to DWP were broken and that it was “absolutely usual for there to be changes between point of tender and delivery”, while DWP was “fully aware” that contracts had not been signed with the 22 organisations at the point the tender was submitted.

The company says it needs fewer locations because the number of assessments expected to take place is lower than anticipated, but government figures show that the forecast number of assessments for 2013-14 has only dropped from 199,000 to 138,000.

News provided by John Pring at


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