Published by Stephen Evans on 17 June 2015
- Our Work
- The Reformer Blog
1 July 2015
Employment and Support Allowance (ESA) featured prominently in Reform’s recommendations last week for this year’s Spending Review. In opposition to the Government’s arbitrary commitment to cut £12 billion from welfare, we argued for principled, structural reform to tackle the drivers of high benefit spend.
For the 2.4 million claimants on incapacity benefits, the current system is doing more harm than good. Perverse financial incentives, limited conditionality, and inadequate in-to-work support, distances people on ESA from work – evidenced by low off flow rates. For the growing number of young people claiming ESA, this risks creating a ‘lost generation’. For those able to work with support, the system cannot meet their needs. The use of ESA as a long term benefit is particularly damaging for those likely to experience fluctuating capability.
The report called for an overhaul of the gateway to the benefit. The purpose of this is to determine a person’s capability for work, but evaluations have revealed significant flaws. The latest independent review of the Work Capability Assessment (WCA) highlighted its inability to assess fluctuating conditions and a lack of expertise to assess mental health conditions. The over simplistic outcome of “fit” or “not-fit” for work fails to serve the many disabled people who could work with support. Furthermore, the medical focus of WCA descriptors means that the ESA assessment is framed by level of disability rather than work capability.
Trials of WCA alternatives have had limited success. An ‘Alternative Assessment’ (AA) collected additional information to the WCA on whether a person’s ability to undertake activities could be sustained and repeated, or was prone to fluctuate and if so, for how much of the time. The study emphasised a need for flexibility but failed to improve on the WCA in assessing capability for work.
More innovative policy responses can be found overseas by looking to countries facing similar problems, such as the Netherlands and Australia. Australia’s Job Seeker Classification Instrument, like the Netherlands Functional Capability Assessment, is designed to assess a person’s proximity to the labour market and not the severity of their disability. Employment history, age and living arrangements are taken into account in addition to health-related barriers to work. This shifts the focus from disability to capability and identifies barriers to work beyond disability. A UK assessment where health plays just one part in assessing capability would redefine the purpose of the benefit and help us to understand how we can support more disabled people into work.
Facing a similarly alarming trend in the number of young people claiming out-of-work sickness benefits, the Netherlands has also introduced a minimum assessment age. Young people, aged 18-27, are given a participation plan with a study or wage subsidy and intense job seeking support. The minimum age avoids long term ‘parking’ on benefits and engages young disabled people in work. This is one option for the UK to consider alongside WCA reform.
The design of ESA fails to serve the needs of claimants. Parking people on long term benefits can be isolating and damage their physical and mental health. Radical reform of ESA is needed to assess capability and support more disabled into work. The Government has committed to finding significant welfare cuts. Let us take this opportunity as a time for structural reform.
Hannah Titley, Researcher, Reform