Published by Professor Roy Sainsbury on 5 February 2016
- Our Work
- The Reformer Blog
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