Reforming ESA: the final frontier?

5 February 2016

Einstein’s definition of madness was doing the same thing and expecting different results. It’s worth remembering when thinking about any welfare reforms, particularly to disability. Reform‘s latest proposals are important and considered. But the devil is in the implementation and the detail.

The first step to solving a problem is recognising you have one. And we do. The UK’s labour market is a great success story: employment has risen, with particular improvements for groups such as lone parents. But some groups are still missing out, and nowhere is this more stark than for disabled people: their employment rate is 30 percentage points below that for non-disabled people.

The benefit system compounds this inequality. Employment and Support Allowance aimed to resolve the flaws in its predecessor, Incapacity Benefit: that was too based on what people couldn’t do, rather than what they could; it was paid at a higher rate than other out-of-work benefits; and little back-to-work support was offered. No wonder that by the mid 2000’s someone on Incapacity Benefit was more likely to retire or die than get a job.

But Reform shows that in practice ESA has replicated many of these problems. This is bad for disabled people, who are not getting the support they need, and it’s bad for the public finances: spending on ESA has consistently outstripped the Office for Budget Responsibility’s forecasts.

So the Government’s commitment to halving the disability employment gap is not just right, but crucial for delivering the Chancellor’s commitment to cut welfare by £12bn.

The right prescription?

Reform focus on three areas.

1.       The rate of ESA

Reform call for a single rate of ‘income replacement’ for out of work claimants, whether disabled or not. This would mean a reduction for many ESA claimants. However, Reform ask why ESA is paid at a higher rate. If it is because there are extra costs associated with disability, then isn’t this what Personal Independence Payment (PIP) is for? If it is because ESA claimants are expected to take longer to find work, then doesn’t this also apply to some Jobseeker’s Allowance claimants and other groups?

I agree with Reform that there is a case for looking at a single rate of income replacement, as long as all the savings from this are reinvested in PIP and other support, and current claimants get transitional protection so they don’t lose out – as Reform argue.

2.       The gateway to ESA

The Work Capability Assessment, the gateway to ESA, was meant to identify what claimants could do (rather than what they can’t do). In practice, this is not what has happened and there have been unacceptable administrative delays and failings. This has brought unnecessary uncertainty and distress to large numbers of people. A pass/fail approach is wrong.

So the case for change is clear, the question is how. Reform call for assessment of health needs to be separated from administrative assessment of need for support. The move to Universal Credit and Reform‘s proposal for a single rate of income-replacement would aid this. But the risk is of having multiple assessments and not seeing health support as part of a back-to-work plan. Many on Jobseeker’s Allowance have health needs too, so there’s an opportunity to build an integrated, personalised assessment for all. We need further study of the right way forward, including a closer look at what other countries are doing.

3.       Rights and responsibilities of claimants

Much attention has focused on the poorer performance of the Work Programme for disabled people. But most disabled people are not on any employment programme at all. Reform argue for greater personalisation and integration of health support. Learning & Work Institute are in favour of greater personalisation, we called for Personal Career Accounts to integrate out-of-work support with training and in-work progression. There is a risk, though, with making health support mandatory and asking health professionals to police this.

We should learn from the successes with increasing lone parent employment. This began with a requirement to attend regular Work Focused Interviews at the Jobcentre, so you had to hear about the support available even though you didn’t have to take it up. The WRAG group already have a similar requirement, but there is a case for increasing the number and frequency of such interviews.

The role of employers is crucial too. We should challenge prejudice where it exists and consider financial incentives, such as National Insurance breaks, for employers taking on ESA claimants.

Lastly, we need to also think about outcomes other than employment, particularly for the support group who are not expected to work. Around one half of benefit claimants lack functional literacy and numeracy – we should be doing something about this. Learning & Work are trialling a Citizens’ Curriculum, a more flexible way for people to get the skills they need. So far the benefits are clear for individuals, and for public services.

The Government is right to want to increase employment for disabled people. Reform identify the right issues. We must be cautious in learning the lessons of history, but ambitious about extending opportunity to all.

Stephen Evans, Deputy Chief Executive, Learning & Work Institute



‘Reforming’ ESA: the final frontier and the last moral boundary – Politics and Insights

15 November, 2016

[…] Reform article, Reforming ESA: the final frontier? says: “There is a risk, though, with making health support mandatory and asking health […]

Sue Jones

23 February, 2016

People who are disabled or chronically and progressively ill are much less likely to get work. Some amongst that group may not be able to work in any capacity. To reduce the complxitiy of this problem to that of the state discerning "able bodied poor" from the disabled is a disgusting regression to the 1834 Poor Law amendment act, with it's focus on notions of deserving and undeserving poor. Neoliberalism is founded on competitive individualism. Meritocracy if you prefer. In such a system even the most dogmatic idiot must concede that such a system creates some winners and other casualities. Sick and disabled people have long been a casuality. Furthermore, cutting sick and disabled people's lifeline support and imposing "conditionality" on them - entailing the use of sanctions - cannot POSSIBLY "support" or "incentivise" them into work. The Conservative-led welfare “reforms” had the stated aim of ensuring that benefit claimants – who have been stigmatised and inaccurately redefined as economic free-riders –are entitled to a minimum income provided that they uphold responsibilities, which entail being pushed into any available work. Conditionality for social security has been around as long as the welfare state. Eligibility criteria have always been an intrinsic part of the benefits system. For example, to qualify for jobseekers allowance, a person has to be out of work, able to work, and seeking employment. But in recent years welfare conditionality has become conflated with severe financial penalities (sanctions), and has mutated into an ever more stringent, complex, demanding set of often arbitrary requirements, involving frequent and rigid jobcentre appointments, meeting job application targets, providing evidence of job searches and mandatory participation in workfare schemes. The emphasis of welfare provision has shifted from providing support for people seeking employment to increasing conditionality of conduct, enforcing particular patterns of behaviour and monitoring compliance. Sanctions are “penalties that reduce or terminate welfare benefits in cases where claimants are deemed to be out of compliance with requirements.” They are, in many respects, the neoliberal-paternalist tool of discipline par excellence – the threat that puts a big stick behind coercive welfare programme rules and “incentivises” citizen compliance with a heavily monitoring and supervisory administration. The Conservatives have broadened the scope of behaviours that are subject to sanction, and have widened the application to include previously protected social groups, such as sick and disabled people and lone parents. There is plenty of evidence that sanctions don’t help people to find work, and that the punitive application of severe financial penalities is having a detrimental and sometimes catastrophic impact on people’s lives. We can see from a growing body of research how sanctions are not working in the way the government claim they intended. Sanctions, under which people lose benefit payments for between four weeks and three years for “non-compliance”, have come under fire for being unfair, punitive, failing to increase job prospects, and causing hunger, debt and ill-health among jobseekers. And sometimes, causing death. I’ve always felt that it is self evident – common sense – that if people are already claiming financial assistance which was designed to meet only very basic needs, such as provision for food, fuel and shelter, then imposing further financial penalities would simply reduce those people to a struggle for basic survival, which will inevitably demotivate them and stifle their potential. However, the current government demand an empirical rigour from those presenting criticism of their policy, yet they curiously fail in meeting the same exacting standards that they demand of others. Often, the claim that “no causal link has been established” is used as a way of ensuring that established correlative relationships, (which often do imply causality,) are not investigated further. Qualitative evidence – case studies, for example – is very often rather undemocratically dismissed as “anecdotal,” which of course stifles further opportunities for research and inquiry. The Conservative shift in emphasis from structural to psychological explanations of poverty has far-reaching consequences. The partisan reconceptualision of poverty makes it much harder to define and very difficult to measure. Such a conceptual change disconnects poverty from more than a century of detailed empirical and theoretical research, and we are witnessing an increasingly experimental approach to policy-making, aimed at changing the behaviour of individuals, without their consent. This approach isolates citizens from the broader structural political, economic, sociocultural and reciprocal contexts that invariably influence and shape an individuals’s experiences, meanings, motivations, behaviours and attitudes, causing a problematic duality between context and cognition. It also places unfair and unreasonable responsibility on citizens for circumstances which lie outside of their control, such as the socioeconomic consequences of political decision-making. I want to discuss two further considerations to add to the growing criticism of the extended use of sanctioning, which are related to why sanctions don’t work. One is that imposing such severe financial penalities on people who need social security support to meet their basic needs cannot possibly bring about positive “behaviour change” or “incentivise” people to find employment, as claimed. This is because of the evidenced and documented broad-ranging negative impacts of financial insecurity and deprivation – particularly food poverty – on human physical health, motivation, behaviour and mental states. The second related consideration is that “behavioural theories” on which the government rests the case for extending and increasing benefit sanctions are simply inadequate and flawed, having been imported from a limited behavioural economics model (otherwise known as nudge” and libertarian paternalism) which is itself ideologically premised. I also explored in depth how sanctions and workfare arose from and were justified by nudge theory, which is now institutionalised and deeply embedded in Conservative policy-making. Sanctions entail the manipulation of a specific theoretical cognitive bias called loss aversion. At best, the new “behavioural theories” are merely theoretical propositions, at a broadly experimental stage, and therefore profoundly limited in terms of scope and academic rigour, as a mechanism of explanation, and in terms of capacity for generating comprehensive, coherent accounts and understanding about human motivation and behaviour. I reviewed research and explored existing empirical evidence regarding the negative impacts of food poverty on physical health, motivation and mental health. In particular, I focussed on the Minnesota Semistarvation Experiment and linked the study findings with Abraham Maslow’s central idea about cognitive priority, which is embedded in the iconic hierarchy of needs pyramid. Maslow’s central proposition is verified by empirical evidence from the Minnesota Experiment. The Minnesota Experiment explored the physical impacts of hunger in depth, but also studied the effects on attitude, cognitive and social functioning and the behaviour patterns of those who have experienced semistarvation. The experiment highlighted a marked loss of ambition, self-discipline, motivation and willpower amongst the subjects once food deprivation commenced.There was a flattening of affect, and in the absence of all other emotions, Doctor Ancel Keys observed the resignation and submission that hunger manifests. The understanding that food deprivation dramatically alters emotions, motivation, personality and that nutrition directly and predictably affects the mind as well as the body is one of the legacies of the experiment. The experiment highlighted very clearly that there’s a striking sense of immediacy and fixation that arises when there are barriers to fulfiling basic physical needs – human motivation is frozen to meet survival needs, which take precedence over all other needs. This is observed and reflected in both the researcher’s and the subject’s accounts throughout the study. If a person is starving, the desire to obtain food will trump all other goals and dominate the person’s thought processes. In a nutshell, this means that if people can’t meet their basic survival needs, it is extremely unlikely that they will have either the capability or motivation to meet higher level psychosocial needs, including social obligations and responsibilities to seek work. Abraham Maslow’s humanist account of motivation also highlights the same connection between fundamental motives and immediate situational threats. Ancel Keys published a full report about the experiment in 1950. It was a substantial two-volume work titled The Biology of Human Starvation. To this day, it remains the most comprehensive scientific examination of the physical and psychological effects of hunger. Keys emphasised the dramatic effect that semistarvation has on motivation, mental attitude and personality, and he concluded that democracy and nation building would not be possible in a population that did not have access to sufficient food. I also explored the link between deprivation and an increased risk of mental illnesses, including schizophrenia, depression, anxiety and substance addiction. Poverty can act as both a causal factor (e.g. stress resulting from poverty triggering depression) and a consequence of mental illness (e.g. schizophrenic symptoms leading to decreased socioeconomic status and prospects). Poverty is a significant risk factor in a wide range of psychological illnesses. Researchers recently reviewed evidence for the effects of socioeconomic status on three categories: schizophrenia, mood and anxiety disorders and substance abuse. Whilst not a comprehensive list of conditions associated with poverty, the issues raised in these three areas can be generalised, and have clear relevance for policy-makers. The researchers concluded: “Fundamentally, poverty is an economic issue, not a psychological one. Understanding the psychological processes associated with poverty can improve the efficacy of economically focused reform, but is not a panacea. The proposals suggested here would supplement a focused economic strategy aimed at reducing poverty.” (Source: A review of psychological research into the causes and consequences of poverty Ben Fell, Miles Hewstone, 2015.) There is no evidence that keeping benefits at below subsistence level or imposing punitive sanctions “incentivises” people to work and research indicates it is likely to have the opposite effect. In 2010/2011 there 61,468 people were given 3 days emergency food and support by the Trussell Trust and this rose to 913,138 people in 2013-2014. Hanna, Gabriel Kreindler, and Benjamin Olken re-analyzed data from seven randomized experiments evaluating cash programs in developing countries and found “no systematic evidence that cash transfer programs discourage work.” The phrase “welfare dependency” purposefully diverts us from political prejudice, discrimation via policies and disperses public sympathies towards the poorest citizens. Conservative claims about welfare sanctions are incommensurable with reality, evidence, academic frameworks and commonly accepted wisdom. It’s inconceivable that this government have failed to comprehend that imposing punishment in the form of financial sanctions on people who already have very limited resources for meeting their basic survival needs is not only irrational, it is absurdly and spectacularly cruel.


08 February, 2016

Regarding your point “Reform call for a single rate of ‘income replacement’ for out of work claimants, whether disabled or not.” Illness/sickness could be argued are different from disability: You could be ill but not disabled; But could be disabled but not ill; Or could be ill and disabled. The reason this is important because someone who is unable to walk, maybe able to carry out a range of jobs and work full time This is where PIP may help them with the added costs of having a disability, for example, a mobility car. Notably their disability may not affect (maybe a little) their ability to earn a living. But someone with a long term illness like MS, Parkinsons etc maybe ill and due to the unpredictable nature of their illness are unable to earn a reliable income. That’s where ESA should apply, but they may not be eligible for PIP. But perhaps sometimes able to carry out a few hours a week here and there, under the “ESA WRAG permitted work rules” when their health allows them. The higher WRAG rate (well would have until the cut to JSA level) compensates them a little for not being able to work a few hours in a week. But importantly wouldn’t penalise them if one week they are too ill to earn an income and be on the same level of benefit as a JSA claimant who by definition are fit for work. This issue was raised in the impact assessment by the government “Welfare Reform and Work Bill: Impact Assessment to remove the ESA Work-Related Activity Component and the UC Limited Capability for Work Element for new claims” where it states “Someone moving into work could, by working around 4-5 hours a week at National Living Wage, recoup the notional loss of the Work-Related Activity component or Limited Capability for Work element.” But what happens if they aren’t well enough to work those 4-5 hours a week?

Greg Wood

05 February, 2016

The question of why sickness benefits are more generous than unemployment benefits is an interesting one. I think the answer is largely historical and to some extent conceptual. Broadly speaking, in 1911 it was assumed that a significant new health problem - such as falling off scaffolding and breaking your back - would render you unable to get a job ever again, so sickness benefit was seen as an income replacement. Unemployment benefit was a meagre payment to cover a short period out of work. That changed between 1945 to 1971, when 'the dole' was more or less the same for all recipients, disabled or not. But for more than 40 years now, government policy has been to try to revert to the 1911 model. However, as Stephen Evans suggests, the devil is in the detail: no government has found a way of differentiating between the 'able-bodied' and the 'incapacitated' (the reason why is worth a book in itself, but IMO it's principally because there is no clear cut-off point: disability is a spectrum, and different people approach different types of work in different ways). Conceptually, I suspect the differential pay rates largely hark back to the old idea of the deserving and undeserving poor - and I'm sure there has been a related worry about perverse incentives. If the dole is too generous, people won't work (goes the argument). If sickness benefits are too generous, people on the dole will try to get them under false pretences (it is feared). The reality is much more nuanced. I suspect the success of this new single-level payment will depend on it being relatively generous. Has that been the direction of travel since 1995, when Incapacity Benefit was introduced, or since 1971? No, it has not.