Hated work capability assessment (WCA) company Atos has had to pay off the government to be allowed to escape its contract a year before it was due to end.
The French firm's contract had been due to end in August 2015, but it has paid a "substantial" amount of money to be allowed out of it early.
Mike Penning, the minister for disabled people, said:
"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."
There is huge scope for improvement to the system; successful appeals against its findings are running at around 30%, a huge figure.
The Citizens Advice Bureau has claimed that, when it supports those appealing, four out of five are successful, pointing to major problems with the method and delivery of assessments.
There is likely to be a break in the contract before a new company is appointed; the government will choose a new single national provider by the beginning of next year before recruiting others to run alongside them.
It believes that using multiple firms and encouraging competition will improve quality, although it has not cited a lower rate of successful appeals as a measure of this and has not announced any major changes to the assessment itself.
The WCA has caused untold damage to disabled and long-term sick people.
It was designed to assess whether they were able to move into work, either with intensive support or without, but poor design and political interference mean it has been blamed for the deaths of vulnerable people.
This includes Mark Wood, who starved to death last year after being found fit for work by Atos and having his benefits stopped.
With nearly five jobseekers for every vacancy, an influx of new people into the jobs market means even less likelihood of getting work for those without it.