The firm that carries out assessments for disability claimants is quitting its contract early, the Government has announced.
Atos has been under fire over the number of assessments it has made as well as waiting times.
The Department for Work and Pensions (DWP) announced that the French firm is exiting from its contract to deliver Work Capability Assessments before it is due to end in August 2015.
Ministers stressed that Atos will not receive any compensation from the taxpayer for the early termination of the contract, and had made a “substantial” financial settlement to the DWP.
Claimants undergo a Work Capability Assessment when applying for Employment and Support Allowance, to see how their illness or disability affects their ability to work.
The DWP said last summer it had identified “significant quality failures” in the written reports produced by Atos following assessments. An improvement plan was put in place, but the Government said it was now looking for a new provider to replace Atos.
The DWP said to ensure a smooth transition, one national provider will be appointed early next year to take over the contract. In the longer term it is intended to move to multiple providers to increase competition.
Mike Penning, Minister for Disabled People, said: “The previous government appointed Atos as the sole provider for carrying out Work Capability Assessments and since then we have carried out several independent reviews and made significant improvements to the assessment.
“Today we are announcing that we are seeking a new provider to replace Atos, with the view to increasing the number of assessments and reducing waiting times.
“I am pleased to confirm that Atos will not receive a single penny of compensation from the taxpayer for the early termination of their contract, quite the contrary, Atos has made a substantial financial settlement to the department.”