The government's disability testing system is criticised for making wrong decisions, causing "misery and hardship" to benefits claimants at a "considerable cost" to the taxpayer.
The Department for Work and Pensions (DWP) introduced work capability assessments (WCA) in 2008 to assess entitlement to employment and support allowance.
Today the public accounts committee (PAC) said that while there has been much criticism of Atos - the firm contracted to conduct WCAs - most of the problems lay with the DWP itself, and criticised the department's complacent attitude to the high number of inaccurate decisions leading to successful appeals.
Between 2011 and 2012 Atos was paid £112.4m to carry out almost 750,000 assessments.
The MPs' report said: "The work capability assessment process is designed to support a fair and objective decision by the department about whether a claimant is fit for work, but in far too many cases the department is getting these decisions wrong at considerable cost to both the taxpayer and the claimant.
The DWP's decisions have been overturned in 38 per cent of appeals. Public Affairs Committee report
The report said that the DWP's decisions have been overturned in 38 per cent of appeals, casting doubt on the accuracy of its decision-making.
"Poor decision-making causes claimants considerable distress, and the position appears to be getting worse, with Citizens Advice reporting an 83 per cent increase in the number of people asking for support on appeals in the last year alone," the report revealed.
"We found the department to be unduly complacent about the number of decisions upheld by the tribunal and believe that the department should ensure that its processes are delivering accurate decision-making and minimising distress to claimants."
The government keeps on insisting its controversial work capability assessment - the fitness to work test - is getting better, writes Channel 4 News Social Affairs Editor Jackie Long.
The problem is, very few seem to believe them. Today's report from the public accounts committee is scathing. The WCA process is getting too many decisions wrong, costing the taxpayer dearly and causing claimants misery and hardship.
The misery and hardship isn't difficult to prove. We've met with many people over the past year and a half who've been through the system designed to establish whether they are eligible for benefit or should be trying to find work.
They've variously described the process as dehumanising, stressful or humiliating. Ironically - for a test supposed to be helping the sick back to work - many have told us it has made their illness worse.
The test is run by the French company Atos and it's faced its fair share of criticism.
But the public accounts committee report though, lays much of the blame at the door ot the Department for Work and Pensions. It says the DWP relies too heavily on the decisions taken by Atos assessors.
And how good are those decisions? Well , according to the committee, 38 per cent of the department's decisions were overturned in appeals.
Clearly something, somewhere along the line is very wrong. The disconnect between the original Atos/ DWP decisions and the decisions later taken by tribunal judges is just too marked.
In the meantime Atos Healthcare were paid more than £112m to carry out 738,000 assessments between 2011 and 2012. The PAC report adding: "It (the department) has failed to withold payment for poor performance."
The employment minister, Mark Hoban, said the report "completely fails to recognise the considerable improvements we have made to the work capability assessment since coming to power in 2010."
Perhaps it's more that although considerable improvements may have been made, it's just not yet enough. The stories we hear of misery and hardship continue.
Meanwhile Citizens Advice report an 83 per cent increase in the number of people asking for support on appeals.
The MPs said they could not arrive at a clear conclusion about whether performance was improving and recommended that the National Audit Office should provide up-to-date performance data.
Margaret Hodge, who chairs the committee, said the DWP was getting "far too many" decisions wrong on claimants' ability to work.
"This poor decision-making is damaging public confidence and generating a lot of criticism of the department's contractor for medical assessments, Atos Healthcare - but most of the problems lie firmly within the DWP.
"The department is too often just accepting what Atos tells it. It seems reluctant to challenge the contractor.
"It has failed to withhold payment for poor performance and rarely checked that it is being correctly charged.
"The department also cannot explain how the profits being made by Atos reflect the limited risk that it bears."
This report completely fails to recognise the considerable improvements we have made to the work capability assessment since coming to power in 2010. Mark Hoban, Employment Minister
However, Mark Hoban, Employment Minister responded: "This report completely fails to recognise the considerable improvements we have made to the work capability assessment since coming to power in 2010, having inherited a system from the last government that was not fit for purpose."
In November 2010, professor Malcolm Harrington was appointed to undertake an independent review of work capability assessments.
Mr Hoban said: "We're implementing all of Professor Harrington's recommendations, and the percentage of people getting long term unconditional support has more than doubled in the last two years.
"Professor Harrington is clear that the changes we are making to the WCA risk being undermined by those who refuse to acknowledge improvements in the process.
"Rather than scaremongering and driving down the reputation of the WCA, critics might like to acknowledge the fact that independent reviews have found no fundamental reforms are needed to the current process because of changes we're making."
Despite Mr Hoban's robust defence of the changes, Richard Hawkes, chief executive of the disability charity Scope, said the report provided more evidence that the fitness for work test was "broken".
He added: "The government has to act. Over the last year we have seen high levels of successful appeals, shocking undercover footage of Atos assessors and horror stories of people inappropriately found fit to work
"Today we can add the Public Accounts Committee's finding that this debacle is a considerable cost to the taxpayer to the bulging dossier of evidence that the test is failing.
"Most disabled people want to work but they face significant barriers, from a lack of skills and experience, confidence and even negative attitudes from some employers."
15 August 2012