Source · Select Committees · Public Accounts Committee
Recommendation 19
19
Accepted
In-housing health assessments poses significant recruitment and retention challenges for DWP.
Conclusion
There is also a risk that the current contractors will gain an advantage for the new service that reduces competition. One way to maintain competitive pressure on the contractors to perform is to keep open the question of whether the service will continue to be outsourced once the new service is rolled out in 2029. The Department told us that it still needs to decide whether to continue to contract out the health assessment aspect of applying for disability benefits or, bring it in-house. However, designing, introducing and implementing an in-house service would be time consuming and the Department would need to do a lot of preparatory work to maintain this as a realistic option.35 We heard how the recruitment and retention of healthcare professionals has been a consistent challenge, but its contractors have successfully managed this challenge. External providers to the DWP have increased the number of healthcare professionals from 2,200 in May 2015 to 4,130 in February 2023.36 This would remain a significant challenge for a potential in-house service. The Department told us that in-housing health assessments was challenging due to civil service pay and the career structure and that it lacked the “recruitment, retention and management skillset” which would help attract and motivate healthcare professionals to work in an in-housed service.37
Government Response Summary
The government agrees and states it will mitigate competitive advantage through market transparency and robust procurement processes. Its future health commercial strategy, to be developed from 2024, will consider the department's role and delivery model for services post-2029.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. Recommendation implemented 4.2 The Functional Assessment Service (FAS) contracts contain specific contractual levers and mechanisms to enable the supplier involvement required to support transformation. This includes test and learn activity and the expansion of the new Health Assessment Service (HAS). Suppliers are incentivised strategically by being a partner in the development of future services, and through mechanisms such as gainshare where suppliers share the rewards that transformation drives. 4.3 Competitive advantage by incumbent suppliers can never be completely overcome, but the department will mitigate this through market transparency and robust procurement processes to encourage competition and increased participation. The department has demonstrated the ability to achieve this in the recently awarded FAS contracts, with two new suppliers. 4.4 The department’s future health commercial strategy will be developed from 2024, putting the department in a strong position to replace services in 2029 and commence transformed services. The strategy will follow Sourcing Playbook best practice, considering the department’s role and interaction with the Market, through application of a delivery model assessment. It will focus on understanding the role of suppliers in the transformed HAS, including whether any element would be best delivered directly by the department; development of the right marketplace for those services, transparency of information with that market as the department continues to develop HAS, the opportunity for market input to the development of services in readiness for procurement, and how best to procure future services. 4.5 The strategy will also explore new contracting mechanisms offered by new UK Procurement Regulations that the department expects to provide more flexibility for contracting authorities in such complex procurements.