Caxton House, London. Photo: Paul Billanie for Welfare Weekly.

Labour has accused the Department of Work and Pensions (DWP) of “rewarding failure” by private firms to accurately assess sick and disabled people for the disability benefit Personal Independence Payment (PIP).

Atos and Capita, two of the three contractors hired to carry out disability assessments on behalf of the DWP, are set to receive more than £700 million by the end of the contracted period.

The shocking sum, exposed by the Press Association, includes a substantial payout of £257 million in 2016.

Atos and Capita have already been paid £578 million since 2013, when PIP was introduced, including £25 million between January and February 2017. Original estimates put the total cost at around £512 million over five years.

The contracts are expected to end in December this year (2017) but could be renewed.

Shadow Work and Pensions Secretary Debbie Abrahams said it’s “beyond belief” that these private firms are receiving “huge payouts at a time of austerity”, especially considering how a high proportion of initial decisions are later overturned following mandatory reconsideration or appeal.

Official DWP statistics show that around 62 per cent of appeals against initial decisions are overturned in the claimant’s favour, amounting to 160,000 people since 2013, with Debbie Abrahams warning the PIP system is in “disarray”.

Commenting on the figures, Debbie Abrahams said: “It is beyond belief that this Tory Government is rewarding failure.

“The PIP process is in disarray and these private companies are receiving huge payouts in a time of extreme austerity.

“It is clear that these costs are spiralling out of control.”

She added: “The Government needs to get an urgent grip on these extortionate payments to private companies, especially at a time when they are getting more and more assessments overturned in the courts.”

Liz Sayce, chief executive of Disability Rights UK, questioned why the DWP has paid extra when over 50,000 disabled people have been forced to return mobility vehicles, often before any appeal is lodged with the DWP.

“If Government is spending an extra £200 million on the companies carrying out PIP assessments we need to ask why”, she said.

“But we also need to ask if this is a good use of taxpayers’ money at a time when over 50,000 people have had to return their Motability cars and the Government has made it more difficult for those with serious mental health conditions to qualify for PIP.”

A spokesperson for Capita said: “We were selected through a rigorous procurement process by the Department for Work and Pensions to undertake personal independence payment assessments in line with DWP’s clearly defined service specification.

“We provide these reports to the department who, alongside considering all other evidence submitted by a claimant, make a decision on whether to award a benefit, and if applicable the level of such an award.

“We are paid according to the number of quality controlled assessments we complete for DWP.”

Correction: This article originally stated that over £700 million had already been paid by the DWP. This was incorrect and is the predicted amount over a five year period, or by the end of the contracted period.