This article is more than 3 years old

This article is more than 3 years old

Two private firms have earned more than £500m in taxpayers’ money for carrying out controversial disability benefit assessments.

The Department for Work and Pensions (DWP) paid Atos and Capita £507m for personal independence payment (PIP) tests between 2013 and 2016, despite fierce criticism of their services by MPs.

Figures up until September this year reported by the Daily Mirror suggest that 61% of the 90,000 claimants who appealed against a PIP decision by the DWP, based on these companies’ assessments, won their case at tribunal. The DWP said it was unsure where this figure came from.

FTSE 100 edges higher but Capita leads the fallers Read more

Hundreds have complained, many via the Guardian, that their benefits have been cut since PIP replaced the disability living allowance (DLA) in April 2013.

The Liberal Democrat leader, Tim Farron, queried how Atos and Capita could have been paid such huge sums. “This adds to the suspicion that these companies are just driven by a profit motive, and the incentive is to get the assessments done, but not necessarily to get the assessments right,” he told the Daily Mirror. “They are the ugly face of business.”

Figures show that the DWP paid Atos and Capita £7m in 2013, £91m in 2014, £198m in 2015, and £211m during the first 11 months of 2016.

Facebook Twitter Pinterest Liberal Democrat leader Tim Farron suggested that companies behind tests are ‘driven by profit’. Photograph: Gareth Fuller/PA

A total of £382m was paid to the IT services firm Atos, a European IT services firm with headquarters in Paris, and £125m to London-based FTSE 100 company Capita.

The Guardian revealed in March that the government was to review all of Atos’s major contracts from Whitehall, which amount to more than £500m, following a serious IT failure. The Cabinet Office review found they were performing “within the normal parameters of large technology contracts” and that Atos provided an appropriate level of professional support.

After the PIP system was introduced, under 65-year-olds had to be reassessed and, up until October 2016, 110,000 out of 526,000 claimants who were reassessed lost their benefits.

MPs criticised Atos in a report by the public accounts committee in March, saying “it did not show an appropriate duty of care to the taxpayer” and questioned why the cost of one type of assessment had risen from £115 to £190. Capita divisional managing director Chris Stroud apologised for a poor quality service in front of the committee in February.

Taxpayers’ cash should go to the needy. Here’s where it actually ends up | Owen Jones Read more

George Osborne announced a £4.4bn cut to benefits for the disabled in March over the course of parliament. The cuts were later shelved after the then work and pensions secretary Iain Duncan Smith resigned in protest.

Theresa May’s administration has back-pedalled further on disability tests, with the work and pensions secretary, Damian Green, revealing in October that chronically sick people claiming employment and support allowance would no longer have to prove every six months that they were still ill.

A DWP spokesman said: “We introduced PIP to replace the outdated DLA system and, as we invite more people to claim PIP, claims have been steadily increasing quarter on quarter since summer 2015. Payments to our providers reflect the amount of work they do for us.”

An Atos spokesman said: “The Atos team undertake PIP assessments on behalf of the DWP and do not take a decision on a person’s eligibility for PIP; that decision can only be taken by the DWP. Each assessment is carried out under the guidelines delivered by the DWP.”

Atos and DWP refused to comment when asked why so many appeals to PIP results were succeeding.

A Capita spokesperson said: “Capita carries out PIP assessments according to DWP guidelines and professional codes of conduct.”

• This article was amended on 27 December 2016. An earlier version described the assessments as being for “work capability” or “fit for work”. Atos and Capita carry out personal independence payment assessments, not fit-for-work tests. The article was also updated to give the findings of a Cabinet Office review of Atos’s major contracts from Whitehall.