NAO warns that scale and complexity of DWP’s Health Transformation Programme leaves it at high risk of delay, cost overruns and not achieving intended benefits

New report recommends that that Department publishes revised business case for Programme to factor in reforms set out in Health and Disability White Paper including abolition of WCA

The National Audit Office (NAO) has warned that the scale and complexity of the DWP's Health Transformation Programme leaves it at high risk of delay, cost overruns and not achieving its intended benefits.

Introducing a new report, Transforming health assessments for disability benefits, the NAO notes that the DWP’s Health Transformation Programme (the Programme) aims to simplify and make the assessment process more accessible for the 3.9 million working-age people who receive at least one of the principal health and disability benefits, and that – 

'The Programme was launched in 2018 and is expected to run until 2029. In its business case for the Programme in 2021, DWP planned to spend around £882 million on developing the Health Assessment Service and £97 million on the Functional Assessment IT service. This is in addition to the £2,095 million expected cost of the 2024-2029 Functional Assessment Service. It has already spent £171 million, mainly in setting up the Programme, the interim contracts, and the new test areas. DWP expects to achieve efficiency savings of around £2.6 billion over the life of the Programme from 2021-2022 to 2035-2036, a net present value of £1 billion.'

The NAO also highlights that –

'In March 2023, DWP published its Health and Disability White Paper setting out a new policy approach 'to help more disabled people and people with health conditions to start, stay and succeed in work'. The Programme will provide the mechanism through which DWP will implement many of the objectives it has set out in the White Paper, including plans to remove the work capability assessment (WCA).'

The NAO goes on to conclude that, while the Programme is ambitious, and represents an opportunity to substantially improve the cost, timeliness, and accuracy of functional health assessments while improving the experience for claimants, the DWP’s approach of transforming services over multiple contracts with in-house transformation areas is innovative and it does not have any examples where this approach has previously been successful to use as a guide.

In addition, noting that the Programme has already been subject to delays due to the Covid-19 pandemic and the DWP’s evolving commercial approach, the NAO sets out a number of challenges that the DWP must carefully manage, including –

  • It is not yet clear how all of the reforms set out in its recent White Paper will affect the Programme’s timetable, cost and benefits. The DWP is still working up the detail of its plans and aims to complete a new business case for approval by spring 2024.
  • The DWP’s approach will require negotiation with and the cooperation of contractors. The Programme requires three phases of integration: rolling out the interim IT solution for providers to use between 2024 and 2029; testing the new Health Assessment Service with providers in specific geographic areas; and (subject to approval) rolling out the full Health Assessment Service to the 2029 contracts.
  • The DWP does not yet have all the data and metrics required for testing and judging if the new Health Assessment Service is successful. The Department is still developing its test and evaluation strategy and has not specified exactly what information it will need from the Health Assessment Service to test new practices and judge that the service is ready to proceed to each stage of its rollout.

The NAO also makes a number of recommendations for the Department, including that it should review the Programme plan and update its business case to factor in the White Paper reforms and should test and learn what is best for the new services between now and 2029.

Head of the NAO Gareth Davies said today –

'While the Programme is ambitious and has the potential to make savings and improve the experience of those being assessed, the scale and complexity of the transformation leaves it at high risk of delay, cost overruns, and of not achieving the intended benefits.

Government should set out and publish a revised business case to improve transparency so that Parliament has a greater understanding of the Programme and the challenges in implementing it.'

For more information, see Transforming health assessments for disability benefits from