The early termination of Atos’s contract to carry out fitness-to-work tests offers an opportunity for transparency and reflection. We must know the details of the deal struck, while ministers should review whether the policy is fundamentally flawed
The news today that Atos’s contract with the Department for Work and Pensions to deliver Work Capability Assessments has been terminated 12 months early is not surprising given the torrid media coverage that it has attracted for many months. It would appear that Atos has not always performed to the standard required by its client, the DWP, and certainly not to the standard expected by many of those being assessed and their representative bodies.
Atos is responsible for delivery of the service to a specification set by DWP. The government is responsible for the policy underpinning these assessments. Accordingly, Atos should be held accountable for its performance, but not for the policy.
I can see why early termination would be seen as beneficial by both the company and the DWP. The government is seen to be tackling contract under-performance and there will be few tears spilt for Atos, especially among service users, their families and carers, and the charities that represent them. Atos found itself, one assumes, financially challenged on this contract, and was most certainly being heavily damaged in terms of its market and public reputation.
When agreement is reached to prematurely terminate public service contracts, one assumes that both parties (the client and the provider) will bear the costs and risks. In this case, it is interesting to note that the government has stated that Atos has not received any compensation. And the chief executive of Atos is quoted as saying that: ‘We are pleased to have reached an agreement with the government to allow us to exit this contract early and we remain committed to delivering essential services to the UK government as a strategic supplier.’
The public is entitled to know the details of the commercial deal that has been struck between the government and Atos to enable the ending of the contract. I very much hope that both parties will willingly publish this without the need for too much external pressure.
This information, while of significant public interest, will not provide all that is required for the public, Parliament, commentators and analysts to form views on the correctness, the value for money and appropriateness of the termination. I believe that it will be necessary to extend the disclosure to include:
- the relevant contract terms in respect of performance, payment, penalties and early termination
- details of payments including financial incentives paid and penalties imposed for under-performance over the lifetime of the contract
- performance data and trends
- user satisfaction information (if available) including complaints
- supply chain information
- the cost of any re-tendering of all or part of the contract
- the original procurement costs incurred by the DWP
The CBI has recently joined others in calling for greater transparency and accountability in public service contracting. Therefore, I hope that the CBI will join with me in this call for disclosure.
I realise that Atos is a publicly listed company and that the DWP will wish not to prejudice its position in terms of any retendering exercise, but these considerations should and need not be barriers to transparency.
In addition, it is be hoped that the government will take the opportunity that this early contract termination offers to review the policy on which Work Capability Assessment is based. There is no public benefit in simply outsourcing the delivery of the service if the policy is, as many believe, fundamentally flawed.
Accordingly, I suggest that a second review is required to consider the practical and operational issues (as well as the commercial ones) of letting such a contract. There must be lessons learnt from the Atos experience. Simply to repeat the same mistakes and build on the same flaws would be irresponsible and certainly not in the public interest.
And if it is going to retender this service, the DWP has to be confident that: it is deliverable; there is sufficient public confidence to enable it to be delivered satisfactorily; and that there will be a competitive supplier response. The DWP would be wise to think twice before proceeding with a new procurement.
Given the experience that Atos has generated and endured, one wonders what conditions and risk-premium based charges many potential bidders might include in their bids; and indeed how many companies will be willing to even consider bidding for what will likely be seen as a poisoned chalice.
The decision for early termination of the DWP-Atos contract offers both the opportunity for a radical extension of public transparency and accountability; and the opportunity to reconsider the policy and its operational delivery.