An electric power assisted steering system comprises a torque sensor, a motor connected to a part of the steering system to provide motor torque to the steering system and a motor controller which is adapted to receive an output signal from the torque sensor and to generate a motor torque demand signal indicative of the torque to be applied by the motor to the steering system. The motor torque demand signal comprises a driver demand component dependent upon the torque applied by the driver; and a diagnostic component independent of the torque applied by the driver and which varies in value over time in a predetermined manner. The system further comprises a monitor that correlates the diagnostic component with the output signal and generates a signal indicating that the output signal is faulty if the correlation falls outside of a predefined range.