The daunting scale of the challenge to help disabled people back to work

10 December 2015

The Government has made a commitment to halve the disability employment gap “so that hundreds of thousands more disabled people who can and want to be in work find employment.” 46 per cent of disabled people work compared to 79 per cent of non-disabled people. Halving this gap would bring around a million disabled people into work. Making real progress towards this within the current Parliament will require dramatically increasing the rate of progress. The gap shrank by only around 10 percentage points in the previous 14 years. Clearly, this is a formidable challenge.

Reform’s new report, out today, makes the case that the number of people claiming disability benefits, and the failure to give them the opportunity to access the health benefits of work, is one of the key unmet policy challenges in welfare reform. There have been real results in other areas, with a million fewer people on the main out of work benefits in the last five years, and the lowest claimant count for unemployment benefit since 1975 – well below the peaks of the 1980s and early 90s. Change to lone parent support have succeeded in halving the number of claimants since the mid-1990s. In contrast, despite many serious attempts, the out-of-work sickness benefit caseload peaked in the early 2000s and has remained essentially unchanged since. There are 2.4 million people claiming, at a cost of £14.2 billion per year. One of the aims of Employment and Support Allowance (ESA), introduced in 2008, was to reduce the number of recipients by a million. But just seven years after ESA was introduced, 42 per cent of new claimants have already been on the benefit for two or more years.

Perhaps most worrying of all is the growing number of young claimants. In the last five years, the number of under 35s has increased by a fifth to 560,000. A third of 16-24 year olds have already been on sickness benefits for more than two years. Remarkably, the UK has a particularly high proportion of young people parked on disability benefits compared to other nations – more than twice as likely to be claiming as the OECD average. Permanently detaching these claimants from work risks several damaging their wellbeing and life chances – what Paul Litchfield, the independent reviewer of the Work Capability Assessment, warned of as a “lost generation”. A further worry is the shift towards a higher prevalence of mental illness, which now makes up nearly half of all out-of-work incapacity-related benefit claims. Of the ten local authorities with the highest claimant rates, eight are in the north of England, many are in old industrial areas.

In the Summer Budget, the Chancellor said; “It is not acceptable that in an economy moving towards full employment, some young people leave school and go straight on to a life on benefits.” As the introduction of ESA has shown, amending the current model is not sufficient. For individuals unnecessarily parked on these benefits, health and work-related skills can deteriorate, motivation is sapped, significant new barriers to work often arise and wellbeing over their lifetime will likely be reduced. Work is not only the most effective route out of poverty, but provides clear benefits for many people with a disability or health condition. A system which fails to deliver this where possible is failing both the taxpayer and claimants themselves. Reform will be publishing further papers early next year setting out our thoughts on how best to tackle this.

Ed Holmes, Senior Researcher, Reform

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