Health and Disability Benefits: Functional Assessment Service Contracts

I would like to update the House on the outcome of the procurement of new health and disability benefit assessment contracts—the functional assessment service contracts—for the period 2024 to 2029. These important new contracts have been subject to a rigorous and competitive process in line with public contract regulations.

The health transformation programme is modernising health and disability benefit services and will create a more efficient service and a vastly improved claimant experience, reducing journey times and improving trust in our services and decisions. It is developing a new customer-focused health assessment service and transforming the entire personal independence payment service, over the longer term. It will play a crucial role in implementing the reforms set out in the health and disability White Paper published in March 2023. The functional assessment service contracts will play a key part in delivering the service transformation being driven by the health transformation programme.

The functional assessment service contracts will bring together all functional health assessment services within a geographic area under a single provider. They will provide the foundation for the new health assessment service, which will eventually replace the different services we and our assessment providers use to undertake health assessments across all benefits, including new IT and processes. The new health assessment service will be fully integrated with other systems, including the transformed PIP service, with the aim of creating a much-improved experience for people who apply for support. The new service is being developed on a small scale initially. The new contracts will provide the flexibility to gradually introduce the new health assessment service once fully developed, before it is rolled out nationally from 2029.

On 25 May 2023, I notified the House that the Department had informed successful bidders in geographic lots 1, 2, 4 and 5. We have now concluded the procurement in lot 3—south-west England—and I am pleased to be able to announce today that the successful bidder is Serco Ltd.

We will now work with providers to ensure the transition to the new contracts is as smooth as possible. To ensure adequate time to safely transition, the functional assessment service contracts will begin in September 2024 and we have extended current contracts to this point to ensure service continuity.

We will also work with the functional assessment service providers to deliver structural reform, removing the work capability assessment via a phased approach over the lifetime of the contracts, as announced in the health and disability White Paper in March 2023.