The National Audit Office (NAO) has raised concerns that the Department for Work and Pensions’ (DWP) plans to digitise and transform the application and assessment process for disability benefits may incur “cost overruns, further delay, or a watering down of its ambition.”
DWP’s Health Transformation Programme aims to simplify and make the assessment process more accessible for the 3.9 million working-age people who receive at least one of the principal disability benefits.
The Programme was launched in 2018 and is expected to run until 2029. In in 2021 DWP said it planned to spend around £882 million on developing the Health Assessment Service and £97 million on the Functional Assessment IT service. This is in addition to the £2,095 million expected cost of the 2024-29 Functional Assessment Service. It has already spent £171 million, mainly in setting up the Programme, the interim contracts, and the new test areas.
DWP said it expects to achieve efficiency savings of around £2.6 billion over the life of the Programme from 2021-22 to 2035-36, a net present value of £1 billion.
In March 2023, DWP published its health and disability White Paper setting out a new policy approach “to help more disabled people and people with health conditions to start, stay and succeed in work”. The Programme will provide the mechanism through which DWP will implement many of the objectives it has set out in the White Paper, including plans to remove the Work Capability Assessment.
Risk of delay and cost overruns
In its report, Transforming health assessments for disability benefits, the NAO found that the Programme represents an opportunity to substantially improve the cost, timeliness, and accuracy of functional health assessments while improving the experience for claimants and increasing the trust they have in the system.
However, the NAO said DWP doesn’t have any examples of where its approach of transforming services over multiple contracts with in-house transformation areas has previously been successful.
“While the Programme is ambitious and has the potential to make savings and improve the experience of those being assessed, the scale and complexity of the transformation leaves it at high risk of delay, cost overruns, and of not achieving the intended benefits,” said head of the NAO, Gareth Davies.
“Government should set out and publish a revised business case to improve transparency so that Parliament has a greater understanding of the Programme and the challenges in implementing it.”
Recommendations
There have already been delays, both due to the COVID-19 pandemic and DWP’s evolving commercial approach. There also remain gaps in DWP’s approach that it still needs to fill, said the NAO.
The NAO also said it is not yet clear how all of the reforms set out in the White Paper will affect the Programme’s timetable, cost, and benefits. DWP is still working up the detail of its plans and aims to complete a new business case for approval by spring 2024.
DWP’s approach will also require negotiation and the contractors’ cooperation. The Programme requires three phases of integration: rolling out the interim IT solution for providers to use between 2024 and 2029; testing the new Health Assessment Service with providers in specific geographic areas; and (subject to approval) rolling out the full Health Assessment Service to the 2029 contracts.
Additionally, DWP does not yet have all the data and metrics required for testing and judging if the new Health Assessment Service is successful. DWP is still developing its test and evaluation strategy and has not specified exactly what information it will need from the Health Assessment Service to test new practices and judge that the service is ready to proceed to each stage of its rollout, according to the NAO.
Among its recommendations, the report calls for DWP to review the Programme plan and update its business case to factor in the White Paper reforms. With several stages before the proposed implementation date, it said DWP should also test and learn what is best for the new services between now and 2029, and set out how the Health Assessment Service will be benchmarked.
