Poor decision-making at the Department for Work and Pensions (DWP) is causing needless suffering to vulnerable work claimants when they are medically assessed, a group of MPs has reported.

Issued today the Commons Public Accounts Committee's study into the DWP's contract management of medical services finds the department is getting decisions wrong too often - at considerable cost to both the public purse and claimants.

Nearly two fifths (38%) of decisions to assess new applications for Employment and Support Allowance and re-examine existing Incapacity Benefit claimants were overturned on appeal last year.

However, the MPs said the fault lies firmly with the DWP and not with outsourced provider Atos Healthcare – which in 2011/12 earned more than £112m for undertaking 738,000 assessments.

Failure to create a competitive market for assessments has resulted in Atos having monopoly supplier status, the MPs claim.  They also said the DWP's unwillingness to challenge Atos or impose financial sanctions for poor performance suggests there needs to be a substantial shake up in how the contract is managed.

Margaret Hodge, chair of the PAC said:  ‘The Work Capability Assessment process hits the most vulnerable claimants hardest.

‘The one size fits all approach fails to account adequately for mental health conditions or those which are rare or fluctuating,' Ms Hodge added.

She acknowledged the department has started to improve, but complained the process remains too inflexible and is so stressful for many applicants that their health simply gets worse.