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The Department for Work and Pensions (DWP) has awarded a £140 million contract for health and disability assessment services for the new Personal Independence Payment (PIP) benefit to Capita.

From 8 April 2013, the PIP will replace the Disability Living Allowance (DLA) benefit for eligible working age people aged 16 to 64. 

Capita’s win is one of three regional contracts that the DWP has awarded, and it will deliver the assessment services across central England and Wales. Atos, which is currently providing assessment services for the DLA, has won the other two contracts to deliver services in Scotland, North East and North West England, and in London and Southern England.

Capita said that the scope of the five-year contract is still being defined, but it will carry assessments for new claimants of PIP, as well as existing claimants of DLA.

The company said that its recent acquisitions in the health space will help the company deliver the services.

Paul Pindar, Capita’s chief executive, said: “Capita has established an extensive capability in health assessment through strategic acquisitions, including Premier Medical, now integrated into our health and wellbeing business and, more recently, Medicals Direct.”

Sarah Burnett, research director at analyst firm NelsonHall, agreed with Pindar: "This contract win shows how well Capita's strategy for gaining specialist skills through small niche acquisitions works.

"Capita has been building on its capability for health assessment since 2004 when it acquired AON Health Solutions for less than £2m, which brought it the capability for assessments of fitness for work following illness and injury. It has added to this since with other acquisitions such as BMI Health Services." 

Burnett added that Atos winning the other two contracts was not a surprise, given its long history of delivering assessment services to the DWP, including for Employment Support Allowance, Incapacity Benefit and Industrial Injuries Disablement Benefit.

Meanwhile, Anthony Miller, analyst at TechMarketView, noted that Capita “seems to be on a bit of a roll in central government of late”.

“Just the other day, they were one of four players awarded contracts in the Department of Health (DH) framework agreement for the provision of health-related managed contact centre services,” he said.